While there is some indication – as US stocks are set to end the year in the red – that the Trump administration is seriously considering making nice with China on the trade-war front, that is not the case when it comes to an escalating tech war.
After the high-profile arrest of one of Huawei’s top executives and amid stepped-up efforts by the US to get allies to drop deals with the Chinese telecom giant, the White House is reportedly now looking at yet another angle of attack.
President Donald Trump is considering issuing an executive order that would prohibit the purchase by private companies of any equipment from Huawei or its fellow Chinese telecom-equipment maker ZTE. Reuters first reported the possible action on Thursday, citing three sources familiar with the situation.
According to the report, the executive order, which would not require approval from lawmakers, has been under consideration for eight months and could come within weeks.
Despite offering superior products at lower prices, Huawei has already been in effect cut out of the market for selling telecom equipment to major US mobile carriers, which have faced pressure from the government to cut ties. But the company has still managed to court business with smaller providers that have said they have no other good options.
Driving the urgency of the US campaign is the race to roll out 5G (fifth generation) mobile networks next year, which China by all accounts is leading by a wide margin. Countries that look for alternatives to Huawei equipment, research has concluded, will be behind the curve when it comes to developing applications for the next-generation networks.
The move comes as some US allies have signaled reluctance to go along with Washington’s efforts. Huawei has said it is still actively participating in 5G trials or receiving bids from companies in the UK, France, Germany and Japan.
This is despite news that Japan has in effect restricted government procurement of Huawei or ZTE gear, and that major telecom companies in the UK and France said they will not use Huawei products for certain core components of existing or 5G networks.
Australia and New Zealand have both boycotted the use of Huawei for 5G, while there are conflicting reports regarding Canada’s plans.