Dutch and British intel experts agree: Trump's right about Huawei

Sergio Conner
May 18, 2019

"While the intent is to punish Huawei, ultimately USA companies are also being penalized", Jacobson said. He served as assistant secretary of commerce for export administration during the presidency of Barack Obama.

Members of Congress and administration officials said the move will make it hard for Huawei to sell many products. American business partners of Huawei could be taking a serious economic damage.

On Wednesday, U.S. President Donald Trump signed an order that bars American companies from using telecom equipment made by businesses said to be a national security risk. The action forces US suppliers to apply for licenses in order to continue selling to the Shenzhen-based firm, significantly limiting access to a market that accounted for $16 billion of its $70 billion procurement budget previous year, according to a Huawei spokesperson. In August, Trump marked a bill that banished the US government itself from utilizing hardware from Huawei and another Chinese supplier, ZTE Corp.

A security robot with Huawei 5G technology is displayed at an exhibition during the World Intelligence Congress in Tianjin, China on May 16, 2019.

Huawei was the world's third largest purchaser of semiconductors past year, accounting for 4.4% of global market share, behind only Samsung Electronics Co Ltd and Apple Inc, according to Gartner, a research firm.

The Trump administration has turned up the heat on China after declaring a national emergency designed ostensibly to protect USA networks from "foreign adversaries".

Customers using Huawei's mobile handsets could also face disruptions in their operating software, industry observers said. It has been used mainly to seize the money of drug dealers, terrorists or collapsed corrupt governments. But only about 2 percent of telecom equipment purchased by North American carriers in 2017 was made by Huawei.

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

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The decision taken on Wednesday risks escalating tensions with China as the world's two largest economies clash over whether Huawei - the world's largest provider of telecommunications equipment - poses a spying risk to Western infrastructure networks. China will not use the retaliatory path punishing American companies, he said.

Huawei vehemently denies involvement in Chinese spying and said blocking it from doing business in the United States would hamper the introduction of next-generation 5G communications technology.

After days of speculation, Trump signed an executive order which, although does not name Huawei, effectively prevents the company from selling its products in the USA, and even buying components from the US.

Shares of Huawei's U.S. suppliers fell on fears that the Chinese company would be forced to stop buying American chips, software and other components.

"The tariff hike by the United States will only bring greater difficulties to the consultations", Gao said.

In a statement, Federal Communications Commission Chairman Ajit Pai called the executive order a "step toward securing America's networks". China has barred foreign companies from building significant market share in data-intensive technology sectors, such as cloud computing and financial services, which is a key sticking point in ongoing U.S. The timing of the listing, however, suggests it is more likely a tactical move in the ongoing U.S. The impact of a Chinese ban on Apple, say, would be felt throughout the supply chain.

Huawei paid consulting outfit Oxford Economics to write a report saying the company's British activities are worth £1.7bn to the UK GDP.

The Reuters News Agency reported this story.

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