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Trump Declares National Emergency to Contain China Threat

18 May 2019

These new restrictions became effective at 4:15 p.m.

Depending on whether this approval is granted or not, this could put the firm in a serious position similar to ZTE's when USA firms were prohibited from selling to it after the Chinese telecoms firms broke Iran sanctions.

The administration of President Donald Trump has been vocal in its criticism of what it sees as Chinese companies using communications technology as a way to potentially spy on the US.

Make no mistake: the economic friction between China and the United States is growing.

"We are ready and willing to (talk to) the USA government and come up with effective measures to ensure product security", the company said in a statement. But the unintended casualties may include United States companies and foreign allies.

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Adam Segal, cybersecurity director at the Council on Foreign Relations, said the executive order "signals to US friends and allies how far Washington is willing to go to block Huawei". Apple would be the most likely target because its products are sold directly to consumers, but China may not want to rev up consumers too much.

The Huawei confrontation has been building for years, as the world's largest company has raced to a huge advance on rivals in developing next-generation 5G mobile technology. (Officially, Huawei claims it's an employee-owned company, but that has come under question recently.) Meanwhile, the United States continues to seek the extradition of Huawei Chief Financial Officer Meng Wanzhou, who was arrested last December in Canada for allegedly knowingly authorizing sanctions-violating activities.

Kevin Wolf, who was assistant secretary of commerce for export administration under President Barack Obama, described the impact of the USA sanctions as "massive". -China trade negotiations. Thus, similar to Commerce's Denial Order against ZTE Corporation (ZTE) a year ago, Huawei's placement on the Entity List could be temporary pending further negotiations with China or the implementation of the regulations called for in the May 15 Executive Order.

"Earlier this year Congress acted well within our constitutional authority to block Huawei from our telecommunications equipment market due to concerns with the company's links to China's intelligence services", he said.

In a separate statement, Huawei said that "unreasonable restrictions" by the US intruded "upon Huawei's rights and raise other serious legal issues". These implementing regulations will nearly certainly include restrictions on transactions with China and entities like Huawei and ZTE.

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Chinese retaliation against USA tariff hikes has included targeting American companies in China by slowing down customs clearance and issuance of business licenses. A chip designed mostly within the United States would make it a US product, even if the chip itself was manufactured elsewhere. "It also gives the government an intelligence bonanza" in the form of a list of every USA supplier to Huawei. -China tariff negotiations, but, with those negotiations deteriorating, the Administration may be using this as a tactic to ratchet up the pressure on China. If the tariff negotiations are successful, it is possible that the US government may offer Huawei an exit ramp from the Entity List as it did for ZTE.

The statement further adds that it gives the secretary of commerce the power to "prohibit transactions posing an unacceptable risk to the national security".

China's Commerce Ministry opposed the USA move against Huawei and threatened to retaliate.

She says looking at Wednesday's executive order from Trump, "In some places, if you did a blind test with China's cybersecurity law and tried to guess which is which, it would be hard to tell".

Washington believes equipment made by Huawei could be used by the Chinese state to spy. By some estimates, in the 5G race, Chinese firms could come to hold around 40 percent of such patents.

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Trump Declares National Emergency to Contain China Threat