President Donald Trump reportedly will sign an executive order this week banning U.S. telecom companies from using equipment deemed risky to national security. The order will not specify individual companies or countries of origin, but it will clearly have the most profound impact on Chinese telecommunications giant Huawei, sources told Reuters Tuesday.
Reuters quoted three U.S. officials who said the Trump administration had worked to plan the executive order for over a year, delaying it several times and potentially delaying it again.
If he issues the order this week, President Trump would draw upon existing legal authority to bar American companies from purchasing equipment that could pose a significant security risk, as the U.S. government believes is the case with Huawei and some other Chinese firms:
The executive order would invoke the International Emergency Economic Powers Act, which gives the president the authority to regulate commerce in response to a national emergency that threatens the United States. The order will direct the Commerce Department, working with other government agencies, to draw up a plan for enforcement, the sources said.
If signed, the executive order would come at a delicate time in relations between China and the United States as the world’s two largest economies ratchet up tariffs in a battle over what U.S. officials call China’s unfair trade practices.
Washington believes equipment made by Huawei Technologies Co Ltd, the world’s third-largest smartphone maker, could be used by the Chinese state to spy. Huawei, which has repeatedly denied the allegations, did not immediately comment.
The administration banned U.S. government agencies last summer from using equipment made by Huawei and ZTE, another large Chinese telecom firm. Huawei is suing the U.S. government to overturn the ban.
The Federal Communications Commission (FCC) has acted to prevent China Mobile from providing telecom services in the United States and may block other Chinese companies from the American market on similar grounds.
The Trump administration stepped up its criticism of Chinese technology theft and security threats this week, possibly laying the groundwork for the coming executive order.
Department of Homeland Security cybersecurity director Chris Krebs warned the Senate Judiciary Committee on Tuesday that Beijing could force Chinese telecom companies to push out updates with hidden back doors and deliberate security flaws, making it possible for Chinese agents to steal data from Western companies or even sabotage U.S. infrastructure. He also suggested Chinese intelligence agents could be planted in teams of technicians sent from China to install or service telecom equipment.
“This is a single-party government. Everything that flows from the central party is a manifestation of their philosophy,” said Krebs, citing the recent Chinese cybersecurity law that effectively gives the Communist Party unlimited authority to co-opt Chinese companies for intelligence work.
The Chinese government insists it has not compromised the security of Huawei equipment and charges to the contrary are merely an effort to “smear” Chinese companies as a tactic in the larger U.S. trade war with China. The Chinese have accused the Trump administration of unfairly protecting American and European companies from competition with Huawei, which generally sells products for cheaper.
Huawei representatives argue that the type of security audits that should be routinely performed on crucial technology from any vendor could mitigate any hypothetical risk their equipment poses. Huawei Chairman Liang Hua has expressed willingness to sign “no-spying” agreements with the United States and European governments, a measure critics deem insufficient because China’s cybersecurity law would override any agreement signed with foreign governments or corporations.