Trump to Ban Huawei and ZTE on New Year

Sources have told international news company Reuters about an upcoming executive order that US President Donald Trump is hoping to sign by the start of the New Year. This order would put an effective nationwide ban on buying Huawei and ZTE products. US companies would no longer be able to buy any telecommunications equipment that Huawei or ZTE made. The information that the Trump government believes Huawei and ZTE to be working for the Chinese government is not new. The US authorities also believe that these companies would spy on America and its people if given a chance to operate there. Both the companies have openly denied these allegations in the past. More recently, they have refused to comment.

The Order

The Trump administration has also made decisions in the past to undermine these companies. A few days ago, Canadian authorities arrested Huawei CFO and daughter of Huawei’s owner Meng Wanzhou on US extradition charges. Fortunately, the situation did not escalate too much on the diplomatic front. Authorities in Canada released the CFO before anything serious could happen. Analysts and experts believe that the order to ban Huawei and ZTE in the US has been in the making for over eight months now. This order would come out in January 2019. The executive order would force the US Commerce Department block Huawei and ZTE products. The Trump administration would cite national security as the cause. Such an executive order would not require approval from Congress. A few months ago, the Trump administration also passed a defense bill. This bill barred the US government from using Huawei or ZTE products. ZTE faced the brunt of the sanctions. However, after heavy lobbying, they lifted the sanctions.

The Impact

The US government is seeking to not only ban products. Huawei and ZTE customers in the rural US are afraid they are also thinking of removing existing equipment. People also fear not getting compensation in return. It is not clear whether such a move by the government is legally possible. However, the order would only target US carriers. Individuals who buy Huawei phones, for example, would not be in any trouble. Huawei Technologies Cos Limited [HWT.UL] and ZTE Corp are two of China’s biggest telecommunication companies. Both have had a significant impact on global progress towards the development of 5G network infrastructure. If the government completely bans the trade and use of their equipment in the US, it could affect the country’s position in the 5G race.  Huawei chairman Guo Ping wrote the following on a WeChat page yesterday:

“Barring Huawei from participating in various 5G markets is like an NBA game without all-stars. You can’t play to the highest possible technical standards.”

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