New Trump order could ban Huawei, say sources

Executive order barring equipment made by risky telcos has been delayed several times

WASHINGTON • President Donald Trump is expected to sign an executive order this week barring US companies from using telecommunications equipment made by firms posing a national security risk, paving the way for a ban on doing business with China's Huawei, administration officials have said.

The order, which will not name specific countries or companies, has been under consideration for more than a year, but has repeatedly been delayed, three officials familiar with the plan said, asking not to be named because the preparations remain confidential. It could be delayed again, they said.

The executive order would invoke the International Emergency Economic Powers Act, which gives the President the authority to regulate commerce in response to a national emergency that threatens the United States.

The order will direct the US Department of Commerce, working with other government agencies, to draw up a plan for enforcement, the sources said.

If signed, the executive order would come at a delicate time in relations between China and the US as the world's two largest economies ratchet up tariffs in a battle over what US officials call China's unfair trade practices.

China's Foreign Ministry accused the US of "deliberately discrediting" Chinese companies.

"This is neither graceful nor fair," ministry spokesman Geng Shuang said at a news briefing in Beijing yesterday.

The issue has taken on new urgency as US wireless carriers look for partners as they roll out 5G networks. While the big wireless companies have already cut ties with Huawei, small rural carriers continue to rely on both Huawei and ZTE switches and other equipment because they tend to be cheaper.

"We urge the US to stop citing security concerns as an excuse to unreasonably suppress Chinese companies and provide a fair and equitable and non-discriminatory environment for Chinese companies to operate in the US."

Washington believes equipment made by Huawei Technologies, the world's third largest smartphone maker, could be used by the Chinese state to spy.

Huawei, which has repeatedly denied the allegations, did not immediately comment.

The White House and Commerce Department declined to comment.

The US has been actively pushing other countries not to use Huawei's equipment in next-generation 5G networks, labelling it "untrustworthy".

Last August, Mr Trump signed a Bill that barred the US government itself from using equipment from Huawei and another Chinese provider, ZTE Corp.

In January, US prosecutors charged two Huawei units in Washington state, saying they conspired to steal T-Mobile US trade secrets, and also charged Huawei and its chief financial officer with bank and wire fraud on allegations that the company violated sanctions against Iran.

The Federal Communications Commission (FCC) in April last year voted to advance a proposal to bar the use of funds from a US$9 billion (S$12.3 billion) government fund to purchase equipment or services from companies that pose a security threat to US communications networks.

FCC chairman Ajit Pai said last week he is waiting for the Commerce Department to express views on how to "define the list of companies" that would be prohibited under the FCC proposal.

The FCC voted unanimously to deny China Mobile's bid to provide US telecommunications services last week and said it was reviewing similar prior approvals held by China Unicom and China Telecom.

The issue has taken on new urgency as US wireless carriers look for partners as they roll out 5G networks.

While the big wireless companies have already cut ties with Huawei, small rural carriers continue to rely on both Huawei and ZTE switches and other equipment because they tend to be cheaper.

REUTERS, BLOOMBERG

A version of this article appeared in the print edition of The Straits Times on May 16, 2019, with the headline 'New Trump order could ban Huawei, say sources'. Print Edition | Subscribe