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Trump Effectively Bans Huawei From US, And It Gets Worse (Update)

Update May 16, 12:51 pm ET - Added a new comment from Huawei and other information.

Huawei’s fortunes in the US have declined once again, thanks to President Donald Trump’s latest emergency declaration and the company’s addition to an unenviable list.

The move could have even larger implications for Huawei's 5G deployments around the world.

Credit: Shutterstock

(Image credit: Shutterstock)

A new executive order states that American companies cannot use telecommunications equipment supplied by companies that the government considers a threat to national security. While the wording is generic, it comes at the same time as the US Commerce Department included Huawei on its ‘Entity List’, which contains companies that are believed to be a danger to America.

Combined together, these two actions pave the way for the prohibition of Huawei’s technology, which will be more specifically detailed over the course of discussions within the government and with American businesses over the next 150 days.

MORE: Trump Tariffs Hiked to 25 Percent: What It Means for You

Previously, the US government has also prohibited its own agencies from using Huawei equipment, citing the links the company has to the Chinese government as a potential avenue for espionage via its technology. This move prompted Huawei to file a lawsuit against the decision, on the grounds that it had not had a chance to present a defence.

At the same time, the US and China’s battle over trade continues, with President Trump raising tariffs on Chinese electronic components and other products up to 25%.

In a statement (quoted by CNN), Huawei said: "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."

It gets worse. The US government is also attempting to convince other nations around the world to follow its lead in keeping Huawei out of their national infrastructures. Since Huawei’s equipment is a key part of many networks, particularly those being currently built to support 5G, countries such as the UK are reluctant to go as far as the US.

And because Huawei has been added to the Entity List, U.S. firms will need to get a license from the Bureau of Industry and Security in order to sell or transfer technology to Huawei, according to CNBC. That means it would be very difficult for Huawei to get components from Intel or Qualcomm or other American companies for its phones, laptops and especially its networking equipment.

Huawei’s head of US congressional, state and local government affairs Don Morrissey said in a later interview with CNN that "All options are on the table," and "Huawei is committed to finding a remedy as fast as we can."

He added that Huawei and US government officials were setting up a meeting to discuss potential solutions to its addition to the entity list, but the two sides had yet to sit down at the table.

These possible remedies include enacting only a partial ban, allowing Huawei to sell its products to a specific group of customers, and for independent monitoring of its technology and networks.