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“Huawei Death Sentence”: Trump Said To Prepare Executive Order Restricting Chinese Telecoms

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Originally appeared at ZeroHedge

In the media frenzy surrounding Special Counsel Mueller rare statement slamming Buzzfeed’s “report” that Trump had instructed his former lawyer Michael Cohen to lie to Congress, an important development in the US-China saga quietly snuck under the radar. Because one day after the WSJ reported a since denied story that the US, or rather Steven Mnuchin, is seeking to lift China tariffs, and on the same day that Bloomberg reported China had offered a path to slash its US trade surplus by importing up to $1 trillion more in US goods, Bloomberg also reported late in the day, that the Trump administration is preparing an executive order that would significantly restrict Chinese state-owned telecom companies from operating in the U.S. over national security concerns, the latest escalation in the main issue at the heart of the US-China feud, namely China’s ongoing technological theft, pardon, “transfer.”

"Huawei Death Sentence": Trump Said To Prepare Executive Order Restricting Chinese Telecoms

While the order, which hasn’t yet been presented to the president, does not explicitly mention Chinese telecom giants such as Huawei Technologies or ZTE by name, and would not outright ban U.S. sales by the firms, it would give greater authority to the Commerce Department to review products and purchases by companies connected to “adversarial countries”, including China, reported Bloomberg citing “people familiar with the matter.”

The underlying tension is familiar to everyone who has followed the recent arrest of Huawei’s CFO in Canada, who is pending extradition to the US: Huawei has been pushing to take a global leadership position in 5G, but many American and foreign officials suspect the company’s products are being used by Beijing to spy on Western governments and companies (despite the rare denial by its reclusive founder Ren Zhengfei who said he would “never do anything to harm any country”). Both Huawei and ZTE have also been targeted by the U.S. for alleged schemes to dodge American sanctions on Iran.

To be sure, the report is hardly a surprise: after all rumors have abounded for months that the Trump administration would target Chinese telecom companies with an executive order to ban their U.S. sales. Last December, Reuters reported in December that Trump would consider an order declaring a national emergency related to the firms.

However, what is notable is the timing, which comes just as various reports suggest a renewed push for a ceasefire in the trade war with China and which in turn helped send the Dow Jones some 500 points higher in just the past two days.

So while it remains to be seen if this particular report will lead to anything more actionable, Bloomberg reports that some U.S. companies are already preparing for a possible executive order by the Trump administration in the next few weeks that could inflict serious harm on Huawei, perhaps making it impossible for the company to operate, according to James Mulvenon, a China specialist who works for defense-contractor SOS International.

“The maximal version is that they would have a death sentence for Huawei like they threatened to do to ZTE,” which of course is the Chinese network-equipment supplier that President Trump spared last year from a threatened cutoff from crucial U.S. parts which nearly led to a collapse in one of China’s largest companies. “The minimal version is that Huawei will be banned from sales in the U.S.”

Citing another “person familiar”, Bloomberg said that an order could be presented to Trump as soon as next month. The order the person outlined would give the Commerce Department discretion to decide which companies and which products to scrutinize.

The preparation of the order comes against the backdrop of Trump’s trade war with Beijing. But national security, not economic concerns, are driving the discussion, the person said.

Reached by Bloomberg, a spokesman for the White House National Security Council wouldn’t confirm whether an order is in the works, but did state that “the United States is working across government and with our allies and like-minded partners to mitigate risk in the deployment of 5G and other communications infrastructure.” In the statement, spokesman Garrett Marquis also said that “communications networks form the backbone of our society and underpin every aspect of modern life. The United States will ensure that our networks are secure and reliable.”

It is unclear if and when Trump will actually pull the plug; what is absolutely certain is that when he does, not only will diplomatic tensions between Washington and Beijing escalate to a new level, but any hopes for a swift resolution in the trade war between the US and China will be crushed (along with the market).

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  • John Whitehot

    chinese customers outnumber US ones about ten to one.

    if China responds in kind against apple we’ll see who’ll face a real death sentence.

  • Garga

    Sour losers!
    As soon as someone else becomes leader in any field or gets close, they freak out and rush to annihilate. Is west able to compete fair and square? When we read history it’s what happens like clock-work, one side freak out by the progress of the other, do whatever they can to destroy them at great costs; sometimes by the British against the Germans and sometimes by the Americans against the French.
    In addition, the US and “like-minded” governments are addicted to project their own sins into others, so when they whine about the Chinese “might” using G5 to spy on them, rest assured that it’s exactly what they are doing to the world (like if you have a Sisco or Linksys router or your instruments has TXI, Lucent, Intel chip, NSA has a backdoor to your LAN or device).

    Funny is, they plan their move apparently without taking into account what might the Chinese do, like they will be cool about it and let the Americans do whatever they want to them. As if there’s no important American company depending on the Chinese parts and materials.

  • vladput

    New Cold War.

  • James

    China will play along nicely for now, and in the meantime buy buy buy!…..all the American/Western assets it can get it’s hands on. I’m surprised Trump isn’t concerned about this, after all, if they own the infrastructure then they’ve got you by the balls.

  • S Melanson

    This is Trumps version of mercantilism – [standard historical definition] ‘the economic theory that trade generates wealth and is stimulated by the accumulation of profitable balances, which a government should encourage by means of protectionism.’.
    https://en.oxforddictionaries.com/definition/mercantilism

    This ‘polite’ definition should have added after protectionism ‘threats and ultimatums’. which is Bolton Diplomacy – a new label I came up with to describe the state of diplomacy today.

  • Smaug

    FWI; Japan, Australia, and New Zeeland have already done this and several more states are considering it. Canada is mad enough they’re considering banning Huawei altogether.

    • Sinbad2

      BS
      Australia has banned Huawei from the 5G roll out not the sale of handsets.
      All the American actions mean that the US will fall even further behind, it’s not like there’s an American competitor, 5G is too advanced for American companies, unless they steal some Chinese technology.

  • Rob G

    China wanna f00k around in the U.S…. Theres ganna be some consequences!

  • John

    The US has more to lose in the market place then China…

  • Sinbad2

    This is how America has always done business.
    Most foreign companies should withdraw from the American market, you can’t negotiate with them.

  • Carol Davidek-Waller

    Donald,
    You’re now the chief executive of the US not CEO of Apple or Google?
    There is nothing in the Constitution that gives you the power to govern other nations or use the power of your office to undermine foreign businesses you don’t like but pose no threat to US security.
    Stop spending on ridiculous war toys and military adventurism and start bolstering R and D and reward US businesses for bringing jobs home, creativity and efficiency.

  • jm74

    US is virtually bankrupt so why would Huawei want to operate in the US when there are other much more lucrative markets.

    • Tommy Jensen

      Because US is where the money is. US has 25% of the world market.
      With 5 chinese per 1 american China has only 15%. Russia has 2%. You guys think you can beat America…………………………….LOL.

  • Tommy Jensen

    Like architects dont mess around with doctors job, politics shouldnt mess around with sport, chess, peoples privacy, art and free markets.
    USA have no ethics nor moral bound. There is no limits it will not break to suck up more.

  • verner

    it’s what you do when you realize that the competitor has better products than yourself – protectionism is the oldest trick in the book, almost and that is where the destitute states of A is today – surpassed everywhere by everyone.

  • Ronald

    Edward Snowden made claims just weeks before Sabrina Meng Wanzhou was arrested, that Huawei was investigated by a MI6 ‘firm’ and NSA, they have not been able to find any back doors, and that is the problem. Countries that use Huawei equipment can not be spied upon by the US.
    The Chinese Ambassador to Canada, Lu Shaye recently said,
    “These people (5eyes) have conveniently ignored the PRISM program, Equation Group, and Echelon – global spying networks that have engaged in large scale and organized cyber stealing and spying surveillance activities on foreign governments, enterprises and individuals”.
    Together giving credence to Ren Zhengfei’s statements. So I am pro Huawei.

    However this all seems like the good cop – bad cop routine. China the good – US the bad, all to cover the ill effects of 5G on organic life.
    see;
    International Appeal: Stop 5G on Earth and in Spacehttp://www.thetruthseeker.co.uk/?p=181419

    • S Melanson

      Good post