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27 Dec, 2018 10:50

Huawei & ZTE may be squeezed out of US market – report

Huawei & ZTE may be squeezed out of US market – report

US President Donald Trump is considering an executive order which effectively bans American companies from using telecommunications equipment made by China’s Huawei and ZTE, according to Reuters, citing three sources.

A new US government move targeting Apple rival Huawei and fellow Chinese telecom company ZTE may come as early as the beginning of 2019. Trump’s executive order is to direct the Commerce Department to block US companies from buying equipment from foreign telecommunications makers which Washington claims pose significant national security risks.

The document, reportedly having been prepared by the White House eight months ago but not finalized yet, will cite the International Emergency Economic Powers Act which gives the president powers to regulate commerce in response to an unusual and extraordinary threat to the country stemming from a foreign source.

Huawei and ZTE will not be directly named in the document, however given that they have already been a matter concern for security agencies, officials are likely to interpret it as targeting the spread of equipment made by the two Chinese telecom giants. A Reuters source also believes that the Commerce Department is expected to interpret the order that way.

RT has reached out to the companies, but they have refused to comment on the report.

Washington has previously accused the two Chinese tech companies of spying and banned government entities from using their equipment, further warning American citizens against using their products and services.

Both Huawei and ZTE rebuked the allegations, with Huawei saying it is aware of US “government activities” aimed at curbing its business in the US market.

Huawei has another separate row with the US government over its alleged noncompliance with Washington’s sanctions against Iran. Earlier this month, the company’s finance chief Meng Wanzhou was arrested and then released on bail in Canada. She still faces extradition to the US and up to 30 years behind bars if convicted of breaking Iranian sanctions.

The potential ban of Huawei and ZTE in the US may also add fuel to the fire of the simmering trade war between the world’s two biggest economies, as Beijing and Washington discuss ways to resolve it.

The same Chinese companies also faced scrutiny in Australia and New Zealand, which together with the US, Canada and the UK belong to intelligence alliance the Five Eyes. In August, the Australian federal government decided to bar Huawei and ZTE from providing 5G technology for the country’s wireless networks, citing national security.

Huawei faced another blow in November when New Zealand blocked it from supplying mobile network kit to domestic company Spark on national security grounds. Another US ally, Japan, is also reportedly considering similar restrictions on government purchases of Huawei and ZTE equipment.

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