Amidst growing tensions for China and its major telecommunication companies, President of the U.S. Donald Trump’ government will now be capable of blocking foreign tech companies from conducting business in the USA, effectively banning the Chinese telecom giant Huawei.
The two-part move announced on Wednesday, involved declaring an emergency over infrastructure for U.S. communications being threatened by foreign companies, and approving the executive order enabling commerce secretary Wilbur Ross to block out companies deemed a threat to national security. The order did not mention names of any companies or countries specifically.
But it was followed up soon with an announcement from the U.S. Commerce Department to add Huawei to the ‘Entity List,’ implying the Chinese company would require approval before doing any kind of business within the U.S. Huawei phones and certain telecommunications equipment have already been banned from U.S. military bases.
There has been renewed cause for concern over the recent acquisition of many American companies by some foreign countries like China, about data privacy and potential espionage efforts. Using foreign technology for U.S. infrastructure for communication, like Huawei’s cell towers, is also now being scrutinized. Meng Wanzhou CFO Huawei is held currently in Canada due to charges by the U.S. for violating Iran sanctions.
Failing trade talks forms the backdrop for this executive order, as China and the U.S. go head-to-head on implementing new tariffs in the last week.
The United States is not the only country stemming the development of Chinese tech business, particularly Huawei. Many countries including Japan and Australia have already banned Huawei in playing any role in building wireless networks of the next-generation – 5G. These countries risk falling back in the worldwide race to develop 5G networks, crucial for plenty of advanced technologies including cars that self-drive.
President Trump has encouraged American companies to push their efforts and increase investments in the development of 5G technology.