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Trump To Ban Chinese Telecom Equipment: Report

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Trump To Ban Chinese Telecom Equipment: Report

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Trump to possibly sign an executive order banning Chinese telecom equipment, according to a report by Politico.

The story cites three anonymous sources, who all claim that Trump would possibly sign the order in the week following February 12th. The order will ban Chinese telecom equipment from US wireless networks before a major industry conference at the end of February.

The conference is MWC Barcelona and it will take place between February 25th and 28th. The aim is to signal the importance of cybersecurity in future high-end technology contracts.

According to a source close to the situation, as infrastructure for the next generation of ultra-high speed internet, known as 5G is being worked on, US Officials want “to move the needle” on security.

“There’s a big push to get it out before MWC,” said an industry anonymous source familiar with the matter.

The Chinese telecom giants Huawei and ZTE have been in the Trump administration’s crosshairs as part of a broader focus on Chinese national security threats that has paralleled the ongoing trade war.

“In December, the Justice Department indicted two Chinese operatives for a decadelong campaign of digital intrusions into US businesses and government agencies. And in January, DOJ unsealed a suite of charges against Huawei and its chief financial officer, who faces extradition to the US for violating sanctions on Iran,” Politico reported.

Huawei and ZTE are also the companies who are pushing the most to establish the 5G infrastructure, since they are proposing lower prices than any of their competitors.

“Contracts are going out now,” one anonymous source told POLITICO. “Extra stigma could change the situation out in the countries on this major decision.”

“We’re going to be asking people to do things, but the US legal and regulatory environment hasn’t really closed the circle yet on this issue,” said Paul Triolo, who leads the consulting firm the Eurasia Group’s global technology practice. “So there’s a lot of pressure now to get this EO out there.”

The White House declined comment requests from Politico and CNBC. However, Politico cited National Security Council spokesman Garrett Marquis who said that the US was “working across government and with our allies and like-minded partners to mitigate risk in the deployment of 5G and other communications infrastructure.”

CNBC did not receive a response from Huawei and ZTE for a comment.

The National Defense Authorization Act 2019 also banned agencies from buying and using Huawei and ZTE equipment.

State Department officials are warning their foreign counterparts about 5G security as often as possible.

“We’re raising it at the highest diplomatic levels,” Rob Strayer of the State Department said on February 6th. “We’re making sure that the most senior policymakers in governments are aware of the momentousness of this decision and what is at stake in the decision they’re about to make.”

Other western countries have also banned Huawei. These include the U.K., Canada, Australia, New Zealand. Japan also blocked the Chinese tech giant. Meanwhile, India invited Huawei to participate in its 5G field trials in December 2018.

The message to Europe about 5G, according to Politico’s second anonymous industry source, has been, “Go slow. There’s no need to rush into this. We need to figure out how to do this now.”

The possible signing of the executive order may also be a way of pressuring China while the March 1st deadline to resolve the trade war.

In mid-January there were othere reports claiming that Trump was preparing an executive order aimed at restricting Chinese telecoms.

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Joe Kerr

No surprise to see the 5 eyes and Japan succumbing to U.S. pressure, but the U.S. will be disappointed that Germany and Italy have refused to ban Huawei from their 5g plans. China now produces more engineering graduates than the U.S. and will overtake it in advanced tech soon, and therein lies the main concern of the U.S. … that China transforms itself from a cheap labour supply to country of advanced technology that competitively beat the U.S. at its own game.

Pave Way IV

I’ll one-up you on that, Joe. Of course greed and profit are always somewhere in the background for ‘U.S. interests’, but this goes far beyond that. This should be a clue: “…US Officials want “to move the needle” on security…” That statement is all about Huawei’s needle being beyond that of the U.S.

Here’s what drives my country’s paranoid leaders insane:

1) Chinese (among others) are damn good hackers. 4G has plenty of holes, and the Chinese have found most of them. The U.S. doesn’t even know how much the existing telecommunications networks are compromised. They usually figure it out well after someone has tapped in or broken the gear’s encryption. They have no idea how many undiscovered hacks are being used by the Chinese right now.

2) Even worse yet, the U.S. doesn’t have any hacks or know much about breaking the encryption easily on Chinese 5G gear like they do on U.S. and Israeli-supplied 4G and backbone gear That’s outrageous!

The US government (and Israel) have the absolute right to listen in on every conversation and see the data streams real time for everyone in the U.S. and any foreigners they know because, hey, if you’re not doing anything illegal, then you got nothing to worry about. Screw the U.S. Constitution – that just protects all potential enemies of the state. Besides, TERRORISM!

And then there’s spying on every last company in the U.S. – priceless for Congress, LE and the IC to cash in on insider information and make a killing in the stock market. Or put anyone they don’t like in prison – because they can also modify the conversations and records with a different set of hacks.

If you can persuade the market to buy U.S. gear – with plenty of engineered-in exploits and back-doors ordered by and known to LE/IC – then monitoring everyone is easy. The Chinese seem unwilling to share those details of THEIR equipment with the US. Outrageous! People could be talking about ANYTHING on their 5G phones without the government being able to listen in. Can you imagine the horror?

Last bit: They can easily prohibit government agencies from buying Huawei equipment, but not necessarily corporations. Corporations WANT Huawei stuff if China isn’t a competitor and the corp’s have more to fear from the U.S. government (and by extension – Five Eyes) from snooping in. Huawei might even not want the Chinese government to know their secrets, so there might be pretty comprehensive security for ANY corporation. Corporate eagerness to buy Huawei equipment for privacy is not a deal-killer though. Huawei itself is vulnerable. Example: extradite the Huawei CFO from Canada on bogus Iran sanction violations (because the US is the sheriff of the universe). The next move, I imagine, will be to prohibit U.S. agencies from contracting services from any company that DOES use any Huawei 5G equipment. That’s kind of a problem for the wireless companies.

Then again, Trump can just nuke all Huawei facilities on earth in the interests of national security and arrest all their surviving employees. Not sure China would like that, but hey…

Joe Kerr

Latest news is there’ll be no meeting with Xi, and Adelson’s orange courtier made a mistake if he thought kidnapping Meng would help his hand with China. Better sell any shares before Wall St. tumbles to zero.

Sinbad2

Xi is in no hurry to meet Trump.
Trump/US are an irresistible force, all bow before them, but they just met an immovable object.

I knew when Xi got made leader for life, that they were going to take the US on, and they will win whatever the price.

You can call me Al

That transformation of a low margin manufacturer (no technology) to a high tech producer happened a decade ago.

Ma_Laoshi

The National Security circus does not “parallel” the trade war: NatSec rhetoric is always a fig leaf for considerations of raw greed and power. Can someone please clarify if the US can ban foreign companies just like that under WTO etc rules (not that I expect Washington to care about those)? Or is there a NatSec loophole?

Anyway, China has had plenty of time to see what kind of creature it faces in the US. Will be interesting to see to what extent they’ll be willing to fight back.

Pave Way IV

Short answer – Yes, NatSec loophole. Details from Reuters Dec 29th article(link):

President Donald Trump is considering an executive order in the new year to declare a national emergency that would bar U.S. companies from using telecommunications equipment made by China’s Huawei and ZTE, three sources familiar with the situation told Reuters…

…The executive order would invoke the International Emergency Economic Powers Act, a law that gives the president the authority to regulate commerce in response to a national emergency that threatens the United States….

…The executive order, which has been under consideration for more than eight months, could be issued as early as January and would direct the Commerce Department to block U.S. companies from buying equipment from foreign telecommunications makers that pose significant national security risks, sources from the telecoms industry and the administration said….

…In August, Trump signed a bill that barred the U.S. government itself from using Huawei and ZTE equipment….

…While the big U.S. wireless companies have cut ties with Huawei in particular, small rural carriers have relied on Huawei and ZTE switches and other equipment because they tend to be less expensive…

…The RWA [Rural Wireless Association] is concerned that an executive order could force its members to remove ZTE and Huawei equipment and also bar future purchases, said Caressa Bennet, RWA general counsel.

It would cost $800 million to $1 billion for all RWA members to replace their Huawei and ZTE equipment, Bennet said…

…Separately, the FCC in April granted initial approval to a regulation that bars giving federal funding to help pay for telecommunication infrastructure to companies that purchase equipment from firms deemed threats to U.S. national security, which analysts have said is aimed at Huawei and ZTE.

The FCC is also considering whether to require carriers to remove and replace equipment from firms deemed a national security risk…

Ma_Laoshi

Amen brother. Any agreement you think you have with the USA can be revoked in a heartbeat on “National Security” grounds. If you try to talk back, you’ll be rebuffed with a curt “We’re exceptional”–and before you know it you’ll have to contemplate if you’re truly prepared to square off with the US Navy by sticking to your guns. Most parties back down well before that stage.

Admittedly I’m conflicted on this, but part of me says serves China right. Since the Cold War restarted in earnest in ~2014, more often that not they’ve been sitting on the fence, content to play Russia and the Empire off against each other. Yes those are the normal rules of realpolitik; but business as usual may not be good enough when you face a creature posing an actual threat.

Real Anti-Racist Action

No countries infrastructure should be built by another.
Each tribe must build their own. If they cannot, then nature has selected them to remain at that level.
China would not want the US to build their internal communications network. And well… the feeling is mutual.

Joe Kerr

Probably not… but U.S. 5g tech is crap, so there’s no point.

Sinbad2

Trump playing King Canute.
If China invented a cure for cancer, Trump would ban it.

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