Chinese firm says ban on tech from ‘foreign adversaries’ will harm US consumers

This article is more than 1 year old

This article is more than 1 year old

Huawei has hit back at Donald Trump’s administration after it declared a national emergency to ban technology from “foreign adversaries” and subjected the Chinese telecommunications company to strict export controls.

An executive order issued by the US president on Wednesday declared a national economic emergency that empowers the government to ban the technology and services of “foreign adversaries” deemed to pose “unacceptable risks” to national security, including from cyber-espionage and sabotage.

The order did not name specific countries or companies but came after months of US pressure on Huawei. It reflects government concerns that equipment from Chinese suppliers could pose an espionage threat to US internet and telecommunications infrastructure.

In a statement reported by the state-run Global Times, Huawei said: “If the US restricts Huawei, it will not make the US safer, nor will it make the US stronger. It will only force the US to use inferior and expensive alternative equipment, lagging behind other countries ... and ultimately harming US companies and consumers.”

The company said it was willing to “communicate with the US to ensure product security”, echoing reassurances given to the UK.

Huawei 'prepared to sign no-spy agreement with UK government' Read more

Trump’s 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 US. The order directs the commerce department, working with other government agencies, to draw up a plan for enforcement within 150 days.

The commerce department said it was adding Huawei and 70 affiliates to its “entity list”, banning the company from acquiring components and technology from US firms without government approval.

The world’s two largest economies have recently increased tariffs in a battle over what US officials call China’s unfair trade practices. Talks between Washington and Beijing have ground to a halt, causing volatility amid concerns about a global trade war.

Gao Feng, a spokesman for China’s ministry of commerce, said: “China has emphasised many times that the concept of national security should not be abused, and that it should not be used as a tool for trade protectionism”.

A foreign affairs spokesman described US actions against specific Chinese companies as disgraceful and unjust. “We urge the US side to stop oppressing Chinese companies under the pretext of security concerns and provide a fair, just and non-discriminatory environment for their normal investment and operation,” the spokesman said at a press briefing ahead of the executive order.

Trump’s commerce secretary, Wilbur Ross, said the order, which has been under review for more than a year, was aimed at protecting the supply chain from “foreign adversaries to the nation’s information and communications technology and services supply chain”.

“Under President Trump’s leadership, Americans will be able to trust that our data and infrastructure are secure,” he said.

Q&A What is Huawei and why is its role in 5G so controversial? Show Hide Fast-growing Huawei is arguably China’s first global multinational. The Shenzhen-based company makes mobile phones, base stations and the intelligent routers that facilitate communications around the world. But its success increasingly concerns the US, which argues Huawei is ultimately beholden to the Chinese Communist party and has the capability to engage in covert surveillance where its equipment is used. Huawei is by some distance the world’s largest supplier of telecoms equipment with an estimated 28% market share in 2019. It was also the second largest phone maker in 2019, after Samsung and ahead of Apple. But Australia banned Huawei from 5G in 2018, with its spy agencies declaring they were worried the company could shut down power networks and other parts of its infrastructure in a diplomatic crisis. Trump banned US companies from working with Huawei last year and has strenuously lobbied others to follow suit, venting “apoplectic fury” in a phone call to Boris Johnson after the UK agreed to allow the Chinese company into 5G. The company had successfully targeted the UK early on. It has supplied BT since 2003 and gradually expanded to the point where it agreed to create a special unit in Banbury, known as the Cell, where the spy agency GCHQ could review and monitor its software code. Vodafone is another key customer. Britain’s intelligence agencies said in January that any Huawei risk could be managed as long as the company was not allowed to have a monopoly. As a result, Boris Johnson concluded Huawei’s market share should be capped at 35% for forthcoming high-speed 5G networks. In July 2020 the UK position changed, and it was announced that Huawei is to be stripped out of Britain’s 5G phone networks by 2027. Oliver Dowden, the UK culture secretary, also announced that no new Huawei 5G kit can be bought after 31 December 2020 – but said that older 2G, 3G and 4G kit can remain until it is no longer needed. Dan Sabbagh Defence and security editor Photograph: Mark Schiefelbein/AP

US officials have previously labelled Huawei a threat and lobbied allies not to use Huawei network equipment in next-generation 5G networks, calling it untrustworthy.

Beijing has pledged to take necessary counter-measures against the US actions, announcing plans this week to increase tariffs on nearly $60bn (£46.7bn) worth of US imports beginning on 1 June, in what the Chinese government said was a retaliatory move after Washington imposed tariffs on $200bn (£155.8bn) of Chinese goods.

Observers say other measures could include added regulatory hurdles for US companies operating in China.

Lu Kang, a spokesman for China’s foreign ministry, said: “The Chinese government naturally cares about the rights and interests of Chinese businesses and the government will take necessary measures to safeguard their rights. As for foreign businesses in China, as long as their operation is lawful, they should not be concerned.”

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Trump is expected to meet China’s president, Xi Jinping, in Japan next month.

Huawei has strongly denied US allegations that its equipment could be used by the Chinese state to spy.

Ren Zhengfei, the company’s founder and chief executive, claimed in February that Huawei would reject any efforts to gather intelligence through its products even if the Chinese government required it to do so.

“We never participate in espionage and we do not allow any of our employees to do any act like that. And we absolutely never install backdoors,” he told CBS News.

Huawei 'prepared to sign no-spy agreement with UK government' Read more

In August, Trump signed a bill that barred the US government from using equipment from Huawei and another Chinese provider, ZTE Corp.

The export restriction is “a grave escalation with China that, at minimum, plunges the prospect of continued trade negotiations into doubt,” Eurasia Group analysts said in a report. “Unless handled carefully, this situation is likely to place US and Chinese companies at new risk.”

It appears the law invoked in Wednesday’s executive order has never before been declared in a way that affects an entire commercial sector.

Huawei said in a statement on Thursday that the decision was “in no one’s interest” and would “affect tens of thousands of American jobs, and disrupt the current collaboration and mutual trust that exist on the global supply chain”.