The Trump administration launched a dramatic attack on Huawei. Photo / AP
The Trump administration launched a dramatic attack on Huawei. Photo / AP
The Trump administration has launched a dramatic attack on Huawei by requiring US companies to obtain licences to sell critical technology to the Chinese telecoms company.
The White House and Department of Commerce took dual actions on Wednesday that will effectively ban Huawei from selling technology into the American market,and could also prevent it from buying semiconductors from Qualcomm in the US that are crucial for its production.
Donald Trump issued an executive order declaring a "national emergency" in relation to threats against US telecommunications, in a move that authorised the commerce department to "prohibit transactions posing an unacceptable risk" to national security.
In a potentially much more significant development, the Commerce Department put Huawei on the so-called Entity List — a move that means US companies will now have to apply for a licence to sell technology to the Shenzhen-based telecoms company.
Tom Cotton, a hawkish Republican senator from Arkansas, welcomed the decision by the Trump administration by tweeting: "@Huawei 5G, RIP. Thanks for playing."
Paul Triolo, an technology policy expert at Eurasia Group, said putting Huawei on the Entity List was a "huge development" that would hurt the Chinese firm but also impact global supply chains involving US companies such as Intel, Microsoft and Oracle.
"The US has basically openly declared it is willing to engage in a full fledged technology war with China," he said, adding that placing Huawei on the "dreaded Entity List has global ramifications, as Huawei supplies dozens of leading carriers around the world".
US security and intelligence agencies have raised concerns about the vulnerability of Huawei-supplied wireless networks to Chinese spying. Photo / 123RF
Huawei responded to the US measures by saying it was ready to engage with the US government to come up with measures to ensure the security of its products.
"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," Huawei said.
"In addition, unreasonable restrictions will infringe upon Huawei's rights and raise other serious legal issues."
Triolo said the US government could give some firms licences to sell to Huawei, but the threat of denial meant "any carrier using [Huawei's] gear will have to reconsider continuing to rely on the company for existing and next generation 5G networks".
Qualcomm declined to comment on the listing of Huawei on the Entity List. The Chinese firm licenses the US company's intellectual property for use in smartphones, although this accounted for less than 10 per cent of its firm's total sales in 2018.
Dennis Wilder, a former head of China analysis at the CIA, said the combination of the executive order and listing on the Entity List was part of a "full court press" against Huawei that represented "the beginning of decoupling" from Chinese telecoms.
The actions against Huawei come after a period in which the White House — backed by career security professionals — have warned about the risks of allowing the Chinese company to help countries build their next-generation high-speed 5G networks.
Australia and Japan have joined the US in banning Huawei but Washington has struggled to persuade allies such as the UK and Germany to follow suit.
The executive order to effectively ban Huawei from selling technology into the American market, which had been debated internally since last year, came just days after the US and China failed to reach a deal to end the escalating trade war.
Huawei executive David Wang. Photo / AP
Marco Rubio, a Florida Republican senator, gave the White House "enormous credit for their efforts to comprehensively tackle the threat that Huawei and other foreign state-directed telecommunications companies".
Mark Warner, a Democratic Virginia senator, said it was a "needed step" that reflected the fact that Huawei and ZTE, another Chinese equipment provider "represent a threat to the security of US and allied communications networks".
China hawks in the administration had been pushing Trump to sign the executive order amid rising alarm within national security circles about the vulnerability of Huawei-supplied wireless networks to Chinese spying.
Trump had previously resisted because he did not want to affect trade negotiations. In February, Trump said he wanted the US to win the 5G ultra-high speed mobile telecommunications race through competition and "not by blocking out currently more advanced technologies". That was widely seen as referring to Huawei.
The move against Huawei comes as China-US trade relations continue to worsen. Trump upped the ante on Friday by saying he would move to put tariffs on the roughly US$300 billion ($457.4b) in Chinese goods that were not already subject to levies. China retaliated by saying it would raise tariffs on US$60b of US imports.
At the same time the US national security establishment has been pushing other countries to bar Huawei from 5G networks.
Australia and Japan have joined the US in barring Huawei from involvement in 5G, and New Zealand's intelligence services have expressed concern.
But the UK and Germany have indicated they will allow Huawei to provide equipment for their 5G networks, in decisions that sparked US anger.
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Written by: Demetri Sevastopulo, Kiran Stacey, James Politi and Nian Liu
