Huawei

Trump administration puts Huawei on export blacklist, can’t import US hardware without government approval

Damien Wilde | May 16 2019 - 5:08 am PT

The ongoing saga between Huawei and the US government has taken yet another turn, with the Trump administration essentially blocking the Chinese tech giant from importing US hardware.

In a statement, the US Commerce Department said that it would be adding Huawei Technologies Co Ltd and all 70 affiliates to an “Entity List.” This will essentially ban Huawei from buying any necessary parts or other equipment without pre-approval from the White House.

White House officials told Reuters that this decision would make it difficult for Huawei to sell many of its products due to reliance on US suppliers. It’s not fully clear how this may affect Huawei’s current or future day-to-day operations, and if this ban extends to operating software such as Google’s Android and Microsoft’s Windows, it could prove to be a very effective ban.

US Commerce Secretary Wilbur Ross said in a statement that this ban will “prevent American technology from being used by foreign-owned entities in ways that potentially undermine U.S. national security or foreign policy interests.”

The US Commerce Department also confirmed that this Huawei ban follows the January indictment of company officials for supposed financial support of Iran. They added that the department has a reasonable basis to conclude that Huawei is “engaged in activities that are contrary to U.S. national security or foreign policy interest.”

An Executive Order has since been published confirming the further Huawei US ban.

The following actions are prohibited: any acquisition, importation, transfer, installation, dealing in, or use of any information and communications technology or service (transaction) by any person, or with respect to any property, subject to the jurisdiction of the United States, where the transaction involves any property in which any foreign country or a national thereof has any interest (including through an interest in a contract for the provision of the technology or service), where the transaction was initiated, is pending, or will be completed after the date of this order, and where the Secretary of Commerce (Secretary), in consultation with the Secretary of the Treasury, the Secretary of State, the Secretary of Defense, the Attorney General, the Secretary of Homeland Security, the United States Trade Representative, the Director of National Intelligence, the Administrator of General Services, the Chairman of the Federal Communications Commission, and, as appropriate, the heads of other executive departments and agencies (agencies), has determined that:

(i) the transaction involves information and communications technology or services designed, developed, manufactured, or supplied, by persons owned by, controlled by, or subject to the jurisdiction or direction of a foreign adversary; and

(ii) the transaction:

(A) poses an undue risk of sabotage to or subversion of the design, integrity, manufacturing, production, distribution, installation, operation, or maintenance of information and communications technology or services in the United States;

(B) poses an undue risk of catastrophic effects on the security or resiliency of United States critical infrastructure or the digital economy of the United States; or

(C) otherwise poses an unacceptable risk to the national security of the United States or the security and safety of United States persons.

(b) The Secretary, in consultation with the heads of other agencies as appropriate, may at the Secretary’s discretion design or negotiate measures to mitigate concerns identified under section 1(a) of this order. Such measures may serve as a precondition to the approval of a transaction or of a class of transactions that would otherwise be prohibited pursuant to this order.

(c) The prohibitions in subsection (a) of this section apply except to the extent provided by statutes, or in regulations, orders, directives, or licenses that may be issued pursuant to this order, and notwithstanding any contract entered into or any license or permit granted prior to the effective date of this order.

While certain Huawei hardware will no doubt be affected by any US trade ban, the fact that many of their devices utilize HiSilicon, rather than Qualcomm SoCs could be beneficial. Bans on Intel hardware though could leave their Windows laptop division essentially dead in the water.

Huawei response to President Trump's executive order which gives the government authority to block transactions that involve information or communications technology that "poses an unacceptable risk to the national security of the United States." pic.twitter.com/rLgbUUt9do

— Arjun Kharpal (@ArjunKharpal) May 16, 2019

Huawei has since responded to President Trump’s Executive Order, stating that this ban will “infringe upon Huawei’s rights and raise other serious issues.”

Huawei is the unparalleled leader in 5G. We are ready and willing to engage with the US government and come up with effective measures to ensure product security. Restricting Huawei from doing business in the US will not make the US more secure or stronger; instead, this will only serve to limit the US to inferior yet more expensive alternatives, leaving the US lagging behind in 5G deployment, and eventually harming the interests of US companies and consumers. In addition, unreasonable restrictions will infringe upon Huawei’s rights and raise other serious issues.

It will be very interesting to see how yet more controversy and fall out will play out between Huawei and the US government. While the US Executive Order doesn’t specifically target Huawei smartphones, it could force Huawei’s hand on their own internally developed OS which was touted earlier this year — especially if any collaboration with Google over Android is now, essentially, blocked.

This ban will also prevent Huawei from making some integral networking equipment already in use within many nations globally. A move like this has many more far-reaching consequences than simply blocking Huawei telecoms equipment from the United States.