We won't follow Trump's Huawei ban — European Union leaders

Cheryl Sanders
May 18, 2019

A woman looks at her phone as she walks past a Huawei store in China.

At the same time, Beijing formally arrested two Canadians who have been detained for months on national security grounds, a move widely seen as retaliation for Ottawa's arrest of a Huawei executive past year at Washington's behest. The new rules require Huawei to get USA government approval to buy American technology, said Kevin Wolf.

US lawmakers have long feared that the firm's equipment could be used to spy on Americans, and Democrats and Republicans lined up in support of the Trump administration's move.

"This decision is in no one's interest", spokesman Chasen Skinner said in an email. Placing Huawei on the US's entity list also bans it from acquiring American companies without politicians' approval, which both thwarts IP transfer to China and allows Trump and pals the ability to directly disrupt Huawei's business growth plans. He didn't respond to a request for further comment.

Highlighting the risk to American companies, investors punished several Huawei suppliers Thursday by selling off shares. Qualcomm fell 4 percent.

Following Trump's executive order, the U.S. Department of Commerce announced the addition of Huawei Technologies and its affiliates to the Bureau of Industry and Security (BIS) Entity List, making it more hard for the Chinese telecom giant to conduct business with U.S. companies.

Over the past year, many US agencies have been warning the administration of the security and espionage threats posed by Huawei and other Chinese companies.

Huawei is now facing resistance from other governments over the risk that its technology could be used for espionage.

The order did not specifically identify any country or company, but USA officials have previously labeled Huawei a "threat" and lobbied allies not to use Huawei network equipment in next-generation 5G networks.

In Indonesia, the country's telecoms minister said earlier this year that it could not afford to be "paranoid" over using Huawei technology.

Such trade bans can be crippling.

As an example, the order cites a criminal case pending against the company in federal court in Brooklyn, New York, over allegations Huawei violated USA sanctions against Iran. The administration ultimately lifted its limits on ZTE, which agreed to pay a fine and restructure its management.

It's also bound to hurt US suppliers and accelerate Beijing's drive toward greater technological independence.

"That doesn't mean every license would be denied, but it would be on a case-by-case basis", he said.

USA companies were prohibited from selling parts and components to ZTE for about two weeks, before the Commerce Department issued a series of temporary general licenses that allowed the company to continue to do business with US suppliers until it agreed to a plea deal a year later. It has never before been used in a way that restricts an entire industry.

This means that it will not be able to source key components from U.S. providers without Commerce Department approval. "Huawei would essentially be a sitting duck". But only about 2 percent of telecom equipment purchased by North American carriers was Huawei-made in 2017.

In a separate statement, Huawei said that "unreasonable restrictions" by the US intruded "upon Huawei's rights and raise other serious legal issues".

Samm Sacks, a cybersecurity fellow with think tank New America, says the administration's executive order "is a page from Beijing's playbook".

One prominent example of the effect is Google Inc.'s Android operating system, which comes preinstalled on Huawei's leading smartphones.

Nelson Dong, a partner at law firm Dorsey and Whitney, disagreed with that assessment.

Markets have swung wildly in recent weeks as trade tensions between the USA and China intensified.

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. Even so, he said, some companies decline to sell to customers who are on the restricted list, even if the sale could be defended legally.

US officials say Huawei will give information it collects to the Chinese government.

Given the assumptions that had underlaid globalization and U.S.

Nonetheless, any well-funded company launching a database product is likely to make Oracle's Larry Ellison stop bathing in banknotes for five minutes and start looking at the competition.

This move is going to directly affect the Chinese trade. The impact of a Chinese ban on Apple, say, would be felt throughout the supply chain.

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