China’s Huawei, ZTE may be blocked in US via an executive order

US president Donald Trump is considering issuing an executive order that would block China’s Huawei and ZTE from selling telecom equipment in the United States, a Reuters report indicated.

The U.S. Department of Defense has already stopped selling mobile phones and modems made by Huawei Technologies and ZTE in stores on its military bases, citing potential risks to national security.
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Both ZTE and Huawei reported lower sales from the U.S.

India, which is considering China as a threat to its national security, is yet to respond to American concerns on Huawei and ZTE. Earlier, the Congress party-led government raised issues about the supply of telecom equipments by Huawei and ZTE to leading telecom operators in India.

Earlier, US president Donald Trump blocked the acquisition of Qualcomm by Broadcom saying it will threat the national security. American officials feel that Broadcom is supported by China or some China companies.

AT&T, America’s second largest telecom operator, stopped selling Huawei smartphones to its customers. Huawei is the third largest smartphone maker in the world – behind Samsung and Apple, according to IDC.

America targets China

Donald Trump’s administration has already targeted Huawei and ZTE, the number one and number four telecommunications equipment manufacturers, with a number of recent actions to restrict their businesses in the United States based on national security concerns.

Wall Street Journal reports that Washington despatched a team to Beijing headed by Treasury Secretary Steve Mnuchin to hold talks over an ever-worsening economic relationship with China. The relationship has seen Trump threaten to impose tariffs on up to $150 billion of Chinese imports, a move that could trigger a trade war between the world’s two largest economies.

U.S. lawmakers and the Trump administration have pressured U.S. companies to not sell Huawei or ZTE products, saying they potentially could be used to spy on Americans. Earlier this year they pushed AT&T to drop a deal with Huawei to sell its smartphones in the United States.

A White House National Security Council spokesman said “While we have no comment on individual actions, protecting critical infrastructure, including the supply chains associated with such infrastructure, is a critical part of protecting America’s national security and public safety.”

Representatives of Huawei and ZTE could not be reached immediately for comment on the possible executive action, though both have denied allegations their products are used to spy.

A U.S. official familiar with ongoing administration talks about Huawei and ZTE said: “These two companies in particular are of concern because of the kind of equipment they produce and their overall market penetration.”

In April, Assistant Secretary for International Markets and Investment Heath Tarbert said the United States is considering ways to restrict sensitive Chinese investments in the United States by invoking an emergency powers law and bringing forward some security review reforms for corporate acquisitions.

Any executive action would come on the heels of a series of U.S. moves aimed at stopping or reducing access by Huawei and ZTE to the U.S. economy, including recent restrictions on U.S. suppliers of ZTE set by the Commerce Department, amid allegations the companies could be using their technology to spy on Americans.

The Federal Communications Commission in April proposed barring the use of funds from a government program to purchase equipment or services from companies that pose a security threat to U.S. communications networks.

FCC Chairman Ajit Pai told Congress in March he shared the concerns of U.S. lawmakers about espionage threats from Huawei.

“Hidden ‘back doors’ to our networks in routers, switches — and virtually any other type of telecommunications equipment — can provide an avenue for hostile governments to inject viruses, launch denial-of-service attacks, steal data, and more,” Pai said at the time.

The U.S. Department of Defense has already stopped selling mobile phones and modems made by Huawei and ZTE in stores on its military bases

“These devices may pose an unacceptable risk to the department’s personnel, and mission,” said Pentagon spokesman Major Dave Eastburn.

A Huawei spokesman said the company’s products “meet the highest standards of security, privacy and engineering in every country we operate globally including the U.S.,” and added “that no government has ever asked us to compromise the security or integrity of any of our networks or devices.”

The Army and Air Force have more than 3,100 stores around the world, and also sell goods online to military personnel. The Navy Exchange has more than 300 stores worldwide, as well as stores aboard more than 100 ships.