Published: Sat, May 18, 2019

Trump’s latest executive order blocks Huawei out of USA market

Trump’s latest executive order blocks Huawei out of USA market

During a meeting in London on Tuesday, Huawei said it was "willing to sign no-spy agreements with governments" as concerns over the security of its products used in mobile networks continued to grow. Credit: Brücke-Osteuropa via Wikimedia Commons.

By Wednesday, the United States and China had already announced staggering new tariffs on a combined $260 billion worth of trade-a figure reflective of a pretty bad week for bilateral relations.

Responding to questions, the official said the order was directed at any transaction involving information and communications technology or services and controlled by or subject to the jurisdiction of a foreign adversary that meets the criteria enumerated in the executive order.

Those stock prices fell following the Trump administration's decision Wednesday to add Huawei and about 70 affiliates to its so-called "Entity List," which precludes the company from acquiring equipment from US firms without government approval.

It was reported that the U.S. Justice Department unsealed an indictment in January of Huawei and some entities that said the company had conspired to provide prohibited financial services to Iran.

Washington's action is expected to disrupt Huawei's production of telecom equipment and smartphones.

While Huawei has its own mobile processors and chips, the USA semiconductor company Qualcomm is a major supplier, he said.

So far, no European country has formally blocked Huawei, and the majority of the company's current global 5G contracts are with companies operating within Europe.

If Huawei "can't get the widget or the part or the software update to keep functioning, then those systems go down", he said.

Under the order that will take effect in the coming days, Huawei will need a United States government license to buy American technology. Credit: Joy Dantong Ma.

The blacklisting follows reports last month that Mrs May was ready to let the Huawei supply some parts of the UK's 5G infrastructure, much to the fury of the Trump administration.

Over the years Huawei and ZTE have spent billions of dollars on buildings factories and training workers to produce 5G equipment at competitive prices.

In a Federal Register notice released on Thursday, the Commerce Department said the new curbs, first announced the day before, would apply to Huawei and affiliated companies around the world from China to Germany and Madagascar.

MF: You talked about Huawei becoming successful in recent years. While the document doesn't name any specific company, Huawei is clearly a suspect. "Whether we can do it in exactly the same way, I can't assure that". In the past, CFIUS as the governing body of worldwide inbound investments, they looked closely at deals that could pose national security threats, meaning the stuff you are investing into is too close to a military base or the company you are trying to acquire is a defense contractor.

Their importance is reflected in their role in setting technology benchmarks and standards for 5G networks in the working groups of the International Telecommunications Union (ITU). And that is a very dramatic change in the scope of the policy.

According to state-owned TV network CGTN, Gao also asked the USA to respect market economy rules and build a transparent and unbiased commercial environment for foreign companies.

Gao Feng, spokesman for the Ministry of Commerce, said at a briefing that the concept of national security "should not be used as a tool for trade protectionism".

But this week, the Trump administration just made its most important move against Huawei yet. It resumed business after reaching a deal with the United States in July. That was further demonstrated in Argentina back in November past year.

Whenever marked, the official request would come at a fragile time in relations among China and the United States as the world's two biggest economies tighten up levies in a fight over what USA authorities call China's out of line exchange rehearses.

Will China Retaliate Over U.S. Sanctions?

The EU imposed import duties of 25% on a $2.8 billion range of imports from the United States in retaliation for U.S. tariffs on European steel and aluminum.

Washington lawyer and trade expert Douglas Jacobson said there will be collateral impact on the USA firms that sell to Huawei.

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