WASHINGTON – President Trump moved Wednesday to ban US telecommunications companies installing foreign equipment that could pose a threat to national security, White House officials said, increasing the fight against China by effectively impeding the sale of Huawei, the country's leading network company.
Mr. Trump issued an executive order instructing trade secretary Wilbur Ross to prohibit transactions "which constitute an unacceptable risk" but do not exclude any nation or company. The measure has long been anticipated and is the latest salvo in the government's economic and security struggle against China. It is also the most extreme movement in the Trump administration's struggle against China's technical sector.
Over the next 150 days, the Trade Department will write the rules to review transactions that fall under the ban, officials said. The Ministry of Commerce said that it would work over the administration on the new rules, consultation with the lawyer's general, the finance minister's secretaries and other agencies.
The order, which applies only to future transactions, left many questions unanswered, including how the trade department will define foreign opponents and establish criteria to ban companies from selling equipment to the United States. The executing measure did not take into account the concerns of agricultural companies that the order would hit them particularly hard. Some of them rely on equipment that already contains parts of Huawei and other Chinese companies.
Mr. Trump declared the threat of foreign opponents on US telecommunications networks a national emergency under a law used to impose sanctions on nations such as Iran and Russia.
Led by Secretary of State Mike Pompeo, US officials have warned allies for months that the United Kingdom States would stop sharing intelligence if they use Huawei and other Chinese technologies to build the core of their fifth generation or 5G network. The network not only promises faster mobile services but also the connection of billions of "internet of things" devices such as autonomous cars, security cameras and industrial equipment – to a new internet architecture.
The Pentagon and US intelligence officials have warned that Chinese companies will be able to control the networks and have expressed concern not only that secure messages could be intercepted or secretly routed to China without the Chinese authorities being able to ask Huawei to close the networks during a conflict and disrupt US infrastructure as different as gas pipelines and mobile phone networks.
Huawei has denied these charges and its chief executive has said he would close the company instead of obeying the Chinese government's order to intercept or divert Internet traffic. US officials say he would have no choice: Chinese law requires the country's company to obey the nation's state security ministry.
Mr. Trump has been deeply involved, quietly met with US telecoms administrators at the White House and weighing different versions of the executive order. He has insisted that the United States must "win" at the 5G competition, only to know that no US company is doing the core switches that will lead 5G internet traffic.
The executive order came amid an escalating trade war between the United Kingdom States and China, with both sides facing hundreds of billions of dollars in recent days. Mr Trump has accused the Chinese government of unfair commercial practices and announced increased fees of another $ 200 billion in Chinese goods last week.
But few problems have received as much acclaimed support in Washington as the Trump administration warnings of the security threats posed by Huawei and ZTE, another company with deep links to the Chinese government. The conversation has become so intense that some have warned of a new red scare, and Chinese officials have said the US has gone beyond caution to paranoia.
The big mobile phone companies have refrained from using Huawei equipment in their 5G systems, but the order will ensure that smaller telecommunications companies in the country avoid Huawei as they build new networks.
Because 5G systems have low-speed, high-speed equipment, the technology is now more suited to urban areas than rural areas. But Huawei is still appealing to rural networks as it is cheaper than alternatives.
The ban can also help with the Trump administration's campaign to get European allies to block Huawei. Some allies questioned why they would block Huawei if the United States did not. Other European officials have suspected that Mr Trump will mitigate or eliminate the ban as part of a trade agreement with China. Most big allies have opposed the Trump administration's pressure, except Australia, which banned Huawei last summer.
The White House, intelligence officials and lawmakers from both parties claim that China has already formed its telecommunications and that the technical industries have also risen inside the Chinese territory for facial recognition, constant monitoring of the population and abuse of human rights.
US officials have also warned that China's exports of Huawei and other technical products have enabled other authoritarian nations to spy on their citizens and gain access to sensitive security and business secrets.
"We need to have a clear picture of the threats we face and be prepared to do what is necessary to counteract these threats," said Ajit Pai, president of the Federal Communications Commission, in a statement. "Today's executive order does just that."
But even though Huawei is excluded from the United States, it will likely control 40 to 60 percent of the networks around the world. It has made a strong marketing quota in Africa, Latin America and parts of Asia where it has great economic influence. US officials have said China has offered subsidized rates and low-interest loans to outperform the few Western competitors, notably Nokia and Ericsson, both European companies.
The United States must join these countries – and must prepare for a day when the US government and companies will have to live in "dirty networks," said Sue Gordon, Deputy Head of National Intelligence.
In January, prosecutors in Washington State accused two Huawei entities of conspiring to steal T-Mobile business secrets and wire fraud.
Senator Lindsey Graham, the Republican in South Carolina and the chairman of the Senate Judicial Committee said he doubted that Chinese companies could meet US standards and laws on surveillance.
"There is no way in hell China can meet these criteria because of the way they are governed," Graham said at a hearing this week. "The only way China can meet the criteria is to stop being China."
The Federal Communications Commission is considering provisions that would support broadband providers who receive federal subsidies from using Huawei or ZTE equipment on their networks. It recently approved an order that prevented China Mobile Limited from providing service in the United States. The agency said it examined similar rules against China Unicom and China Telecom Corporation.