President Trump declared a national emergency and issued an Executive Order prohibiting the acquisition, importation or use of foreign information and communications technology that poses a risk of sabotage or other harm to U.S. national security. The Executive Order was followed shortly thereafter by an announcement by Commerce Secretary Wilbur Ross that Chinese telecommunications company Huawei and its affiliates had been added to the Bureau of Industry and Security (BIS) Entity List.
Commentary / Joseph V. Moreno
The implications of the executive order and the addition of Huawei to the Entity List could be highly disruptive to the Chinese company, which has been charged in the U.S. with violating Iranian sanctions laws and has long been suspected of being an arm of the Chinese government. United States companies will now be required to obtain an export control license from BIS in order to sell or transfer raw materials or other technology to the Chinese company, a move that will likely be very harmful to Huawei's supply chain. Such a license will be denied if BIS determines the sale or transfer would pose a danger to U.S. national security, a process likely to make them extremely difficult to obtain. The executive order could also lead to an eventual ban on the import of Huawei equipment to the United States.
A similar step was taken in 2016 against another Chinese telecom, ZTE Corp., which was ultimately lifted following a settlement in 2018. In both cases, the actions were based on concerns that the company posed a sabotage or espionage threat to 5G mobile network technology being rolled out in the United States and globally. The U.S. government has already barred itself from obtaining equipment supplied by ZTE or Huawei.
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