Using Huawei for 5G is an unnecessary risk, says former spy chief

Trump has signed an executive order to ban foreign telecoms equipment

USDCNH Nears Decade High, Huawei Ban Worsens US-China Relations

President Donald Trump has signed an executive order that bans the use of telecommunications equipment from foreign firms deemed a national security risk.

The missive, which could ultimately become a blanket ban, will "prohibit transactions posing an unacceptable risk to the national security of the United States or the security and safety of United States persons", according to a White House statement.

"The operators all work with Huawei technology in their systems, anyway", said Jochen Homann, the head of the federal network agency of Germany, noting that "if Huawei were excluded from the market, this would delay the rollout of the digital networks", according to the Guardian.

The US Department of Commerce's Bureau of Industry and Security (BIS) said it would add Huawei and its affiliates to its "entity list" over alleged Iran sanctions violations. Just $5 a month.

Under the International Emergency Economic Powers Act, the president can add foreign companies to a list that would ban the company from acquiring parts and technology from USA companies without government approval. While this order, which invoked the International Emergency Economic Powers Act, did not initially name Huawei, his administration took separation action hours later by releasing a blacklist of companies.

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.

"We urge the United States to stop the wrong approach", said foreign ministry spokesman, Lu Kang.

She says looking at Wednesday's executive order from Trump, "In some places, if you did a blind test with China's cybersecurity law and tried to guess which is which, it would be hard to tell".

Also, the Chinese government may choose to take measures against U.S. companies in China, with Apple being a prominent target.

The ban on Huawei, which has yet to take effect, would also affect the United States companies who conduct business with Huawei.

"China has emphasised many times that the concept of national security should not be abused, and that it should not be used as a tool for trade protectionism", Gao Feng, spokesman at the Chinese commerce ministry, told reporters.

"The China government doesn't speak for us and we don't speak through the Chinese government". "In addition, unreasonable restrictions will infringe upon Huawei's rights and raise other serious legal issues".

In the ZTE case, however, Trump eventually overturned the ZTE ban after a personal request from Chinese President Xi Jinping. The format of these moves - an executive order and Commerce Department decision - means they can be overturned as easily as they were instituted. Plus, as my colleague Ankit Panda noted, the Trump administration could keep Huawei on the Entity List even while rendering the designation toothless by simply granting whatever licenses are requested.

If Trump is waiting for Xi to come begging for a reprieve, though, he's misread the changed circumstances.

"The escalation of China-US trade frictions will have a definite impact on the economies of the two countries and the world economy", he said.

The two countries are having a trade war that is partly about a struggle for global economic and technological power.

But its business has come under pressure over the past year given mounting worldwide scrutiny, led by US allegations that its equipment could be used by Beijing for spying, a concern the company has said is unfounded. He is a cybersecurity director at the U.S. Council on Foreign Relations.

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