Fri | Aug 23, 2019

Huawei hit by US export controls, potential import ban

Published:Friday | May 17, 2019 | 12:33 AM

In a fateful swipe at telecommunications giant Huawei, the Trump administration issued an executive order Wednesday apparently aimed at banning its equipment from US networks and said it was subjecting the Chinese company to strict export controls.

Huawei would be the largest business ever subjected to the controls, a law-enforcement measure that requires it to obtain US government approval on purchases of American technology, said Kevin Wolf, who had been the assistant secretary of commerce for export administration in the Obama administration.

“It’s going to have ripple effects through the entire global telecommunications network because Huawei affiliates all over the planet depend on US content to function, and if they can’t get the widget or the part or the software update to keep functioning then those systems go down,” he said.

Asked if that could include barring Google from selling its Android operating system, which Huawei uses on its handsets, Wolf said it would be premature to say until he’s seen a published order from the Commerce Department’s Bureau of Industry and Security to be sure of the scope.

The executive order declares a national economic emergency that empowers the government to ban the technology and services of “foreign adversaries” deemed to pose “unacceptable risks” to national security — including from cyberespionage and sabotage.

While it doesn’t name specific countries or companies, it follows months of US pressure on Huawei. It gives the Commerce Department 150 days to come up with regulations.

Washington and Beijing are locked in a trade war that partly reflects a struggle for global economic and technological dominance, and Wednesday’s actions up the ante.

The export restriction is “a grave escalation with China that, at minimum, plunges the prospect of continued trade negotiations into doubt,” said Eurasia Group analysts in a report.

“Unless handled carefully, this situation is likely to place US and Chinese companies at new risk,” the report said.

It appears the law invoked in Wednesday’s executive order, the 1977 International Emergency Economic Powers Act, has never before been declared in a way that impacts an entire commercial sector. It has routinely been used to freeze the assets of designated terrorists and drug traffickers and impose embargoes on hostile former governments.

The order addresses US government concerns that equipment from Chinese suppliers could pose an espionage threat to US Internet and telecommunications infrastructure. Huawei, the world’s biggest supplier of network gear, has been deemed a danger in US national security circles for the better part of a decade.

US justice and intelligence officials say Chinese economic espionage and trade secret theft are rampant. They have presented no evidence, however, of any Huawei equipment in the US or elsewhere being compromised by backdoors installed by the manufacturer to facilitate espionage by Beijing. Huawei vehemently denies involvement in Chinese spying.

Huawei said blocking it from doing business in the United States would hamper introduction of next-generation communications technology in which the company is a world leader.

– AP