Huawei responds to Trump's national emergency ban on foreign telecoms

Saturday, 18 May, 2019

The steps taken against Huawei this week raise obvious parallels to last year's "death sentence" on another Chinese ICT firm, ZTE. President Trump banned the USA government from using any Huawei or ZTE equipment back in August.

The order did not specifically identify any country or company, but USA officials have previously labelled Huawei a "threat" and lobbied allies not to use Huawei network equipment in next-generation 5G networks.

First, the White House issued an "Executive Order on Securing the Information and Communications Technology and Services Supply Chain", which boils down to granting the executive branch massive power to veto the use of "information and communications technology or services designed, developed, manufactured, or supplied, by persons owned by, controlled by, or subject to the jurisdiction or direction of a foreign adversary".

A Huawei spokesman said: 'We are an independent, employee-owned company which does not take instructions from the Chinese government'. The decision comes as some European countries consider whether or not to allow Huawei into their 5G systems.

"This is a direct message to Europe about how it should be thinking of the future of its 5G networks", says Paul Triolo, geotechnology head at political consultancy Eurasia Group.

In other words, if a foreign company produces a product that relies on components or technology provided by US companies, the USA government can effectively cut off the part of the supply chain for the foreign company's product that is produced by US companies.

5G's importance to emerging industries and its reliance on a complex mixture of software and hardware have countries like the US anxious that adversaries could easily hack the networks to access user data and divert communication traffic to their own servers.

At the same time, the US Commerce Department announced an effective ban on US companies selling or transferring US technology to Huawei.

The fears about Huawei are centered on one point only: It is based in China and there is a belief-which both Huawei and China have denied, repeatedly-that it is required to work hand-in-hand with Chinese security services.

The Trump administration has pressured its allies to preemptively ban Huaweiequipment from their5G networks, with limited success.

Last month, former defence secretary Gavin Williamson was sacked after details about Huawei's potential involvement in the UK's 5G network - discussed at the National Security Council - were leaked to the Daily Telegraph.

"And US Senator Tom Cotton, from Trump's Republican Party, tweeted: "@Huawei 5G, RIP.

A similar USA ban on China's ZTE Corp had nearly crippled business for the smaller Huawei rival early a year ago before the curb was lifted.

The president's executive order does not identify a country or company by name.

It came less than 24 hours after Mr Trump signed an executive order banning. President Trump first took action by signing an executive order declaring a national emergency and banning United States companies from using telecommunications equipment made by firms deemed to pose a national security risk.

The entity listing affects major firms like chipmakers Qualcomm and Intel, which are Huawei suppliers.

The US Commerce Department followed up with a more direct hit on the tech giant, adding it to a blacklist that will make it much harder for the firm to use crucial US components in its array of phones, telecom gear, databases and other electronics.

In the paper's report, Mrs May was said to have overridden ministers who had expressed concerns about the plans. The company criticized the move as "unreasonable".

Richard Dearlove said, in the forward to a report by the Henry Jackson Society thinktank, the fact that the United Kingdom government "now appears to have made a decision to place the development of some its most sensitive critical infrastructure in the hands of a company from the People's Republic of China (PRC) is deeply worrying". He was referring to the thousands of antenna stationsthat will process 5G bandwidth.

In recent months, the USA government has taken a number of steps against the firm, including getting Canadian authorities in December to arrest Huawei CFO Meng Wanzhou over allegations of defrauding several banks by concealing payments from Iran in violation of US sanctions.

There will be less impact on Huawei's mobile handset business.

Two other Huawei affiliates were charged this year with stealing tech secrets from telecom group T-Mobile in a separate case.

Restrictions on sales "would be awful for any Huawei supplier, and for the semiconductor industry at large", Chris Caso, a semiconductor analyst at Raymond James, wrote in a research note.

Huawei said in a statement that losing access to United States suppliers "will do significant economic harm to the American companies" and affect "tens of thousands of American jobs".