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Fred Dunkley

Fred Dunkley

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Fred Dunkley is a tech analyst, writer, and seasoned investor. Fred has years of experience covering global markets and geopolitics. 

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Executive Order Targets Huawei Over Espionage

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Everything’s a national security concern these days, but while auto tariffs might have squeaked through on that rule are a bit shaky, Trump’s executive order banning U.S. telecommunications firms from installing foreign-made equipment is on more solid ground here. The executive order declares a national economic emergency giving the U.S. government the power to ban the technology and services of “foreign adversaries” deemed to pose “unacceptable risks” to national security — including from cyber espionage and sabotage.

Even though the administration does not outright name China--and specifically Huawei--as the intended target of the executive order, shortly after its announcement, the U.S. Commerce Department formally added Huawei, and 70 of its affiliates, to the ‘Entity List’ of companies considered to be undermining American interests.

The list ensures banning Huawei from buying parts and components from American companies without official approval.From now on, all U.S. companies must apply for a license to sell technology to Huawei, including U.S.-based Qualcomm.

China’s government has slammed the move as “unreasonable....disgraceful and unjust”. Huawei says the ban would ultimately hurt American businesses and consumers, and slow down U.S. efforts to develop 5G technology.

The decision could spark retaliation from China and significantly turn the heat upon US companies.  

Chinese Foreign Ministry spokesman Lu Kang tolda media that China will take measures to defend the interests of Chinese companies, without providing details.

Huawei, the world’s third-largest smartphone company, after Samsung and Apple, was making a major push to sell phones into the U.S. this year but was thwarted significantly by pressure from the U.S. government.

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In fact, earlier this year, U.S. intelligence heads warned American citizens against using Huawei and ZTE products. It’s nothing new, really. As far back as 2012, a U.S. Congressional report labeled Huawei as a national-security threat, saying its equipment could allow China to spy on telecommunications networks.

Nor is the U.S. alone here. Australia and New Zealand have made similar moves—also under pressure from the U.S.

In April, Australian Defense department said it was phasing out its use of Huawei and ZTE phones for department officials. Last November,  New Zealand’s security services banned Huawei from supplying mobile network kit to a domestic company on national security grounds.

But it’s a short list of allies.

The UK isn’t playing the same game. In early February, Huawei met with British officials and then announced it would invest $4.2 billion in the UK over the next five years. The Chinese tech giant is also conducting pre-commercial 5G trials in many of the world’s biggest cities in Europe, Japan and Canada.

The spying issue isn’t going to sneak by Europe without any drama, though. Dutch intelligence services are currently investigating Huawei for allegedly spying for the Chinese government by leaving a “back door” open to customer data, according to a new report released today.

By Fred Dunkley for Safehaven.com

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