WASHINGTON—The Commerce Department said on May 15 it was adding Huawei Technologies and 70 affiliates to its “Entity List”—a move that bans the company from acquiring components and technology from U.S. firms without government approval.
Commerce Secretary Wilbur Ross said in a statement that President Donald Trump backed the decision to “prevent American technology from being used by foreign-owned entities in ways that potentially undermine U.S. national security or foreign policy interests.”
Trump signed an executive order earlier in the day that bars U.S. companies from using telecommunications equipment made by firms deemed to pose a national security risk.
The executive order invokes 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 directs the Commerce Department, working with other government agencies, to draw up a plan for enforcement.
While the order didn’t specifically name any country or company, U.S. officials have previously labeled Huawei a “threat” and lobbied allies not to use Huawei network equipment in next-generation 5G networks.
The U.S. administration, lawmakers, and experts have voiced strong concerns that products made by the Chinese telecom giant could be used by the Chinese regime for spying, given the Chinese firms’ lack of autonomy under China’s authoritarian system.
In August 2018, Trump signed a bill that barred the U.S. government itself from using equipment from Huawei and another Chinese provider, ZTE Corp.
In January, U.S. prosecutors charged two Huawei units in Washington state saying they conspired to steal T-Mobile trade secrets, and also charged Huawei and its chief financial officer Meng Wanzhou with bank and wire fraud on allegations that the company violated sanctions against Iran.
The Federal Communications Commission in April 2018 voted to advance a proposal to bar the use of funds from a $9 billion government fund to buy equipment or services from companies that pose a security threat to U.S. communications networks.
Federal Communications Commission Chairman Ajit Pai recently said he was waiting for the Commerce Department to express views on how to “define the list of companies” that would be prohibited under the FCC proposal.
The issue has taken on new urgency as U.S. wireless carriers look for partners as they roll out 5G networks.
While the big wireless companies have already cut ties with Huawei, small rural carriers continue to rely on both Huawei and ZTE switches and other equipment because they tend to be cheaper.
The Rural Wireless Association, which represents carriers with fewer than 100,000 subscribers, estimated that 25 percent of its members had Huawei or ZTE equipment in their networks, it said in an FCC filing in December 2018.
At a hearing on May 14, U.S. senators raised alarm about allies using Chinese equipment in 5G networks.
By David Lawder