The United States federal government has become increasingly resistant to Chinese technology companies over the past year, over fears that they could be conducting surveillance on behalf of China's government. Huawei in particular has been under fire as it tries to build 5G infrastructure in several countries. Earlier this year, it was rumored that an Executive Order could ban Huawei's networking equpment in the US, and now the law has been put into force.
President Trump signed the "Executive Order on Securing the Information and Communications Technology and Services Supply Chain" earlier today, his 103rd executive action. It outright bans telecoms from using equipment "designed, developed, manufactured, or supplied, by persons owned by, controlled by, or subject to the jurisdiction or direction of a foreign adversary."
While the order doesn't name any countries or companies by name, it's clear that the order is aimed at China and Huawei. The Department of Commerce today added Huawei to its Entity List, which bans the company from buying US parts and components from American companies without approval from the US government.
That move places Huawei in a somewhat-similar position to where ZTE was last year, when a trade ban prevented ZTE from importing any US-made hardware components. The Department said in a statement, "this action stems from information available to the Department that provides a reasonable basis to conclude that Huawei is engaged in activities that are contrary to U.S. national security or foreign policy interest."
Huawei lands on the Commerce Department entity list pic.twitter.com/MLWrUn91BA
— John Hendel (@JohnHendel) May 15, 2019
It's not immediately clear what impact this will have on Huawei's operations. If the company's network hardware heavily relies on US components, this could critically hurt Huawei's ability to manufacture networking equipment — even to countries still buying said equipment. While the Executive Order doesn't target Huawei's smartphones at all, the Entity List addition might affect phone production — iFixit's teardown of the P30 Pro points to at least a few components coming from American companies.
The new actions against Huawei are also part of a larger trade war between the United States and China, which has slowed down retail sales and industrial production in both countries over the past month, and prompted fears of a new global recession. It's possible that the new ban on Huawei hardware could be an important playing card for the White House, much like ZTE's trade ban was during another fight with China last year.