With eye on China, Trump escalates cybersecurity battle with executive order

The federal government will be able to block foreign technology companies from doing business in the U.S., setting the groundwork for a unilateral ban on Huawei's U.S. business interests.
Image: Donald Trump and Xi Jinping
President Donald Trump and China's President Xi Jinping meet business leaders at the Great Hall of the People in Beijing on Nov. 9, 2017.Damir Sagolj / Reuters file

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By Jason Abbruzzese

President Donald Trump on Wednesday effectively banned Chinese technology giant Huawei from doing business in the U.S., a move that comes amid growing tensions with China and some of its major technology and telecommunications companies.

In a two-part move, Trump declared a national emergency over foreign threats to U.S. communications infrastructure and services, issuing an executive order that gave Wilbur Ross, the secretary of commerce, the ability to block companies deemed a national security threat. No specific countries or companies were mentioned in the order.

But shortly thereafter, the U.S. Department of Commerce announced that it would be adding Huawei to its "Entity List," meaning any Huawei business in the U.S. will now require approval from the Commerce Department's Bureau of Industry and Security.

"This will prevent American technology from being used by foreign owned entities in ways that potentially undermine U.S. national security or foreign policy interests,” Ross said in a press release. “President Trump has directed the Commerce Department to be vigilant in its protection of national security activities.

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The acquisition of U.S. companies by foreign countries, particularly China, in recent years has been the subject of renewed scrutiny over concerns that sensitive information, such as personal and potentially embarrassing personal details, could be taken and used in espionage efforts. Most recently, the Chinese gaming company Kunlun said it had agreed to a request by the U.S. government to sell the popular gay dating app Grindr.

There has also been scrutiny of the use of foreign technology for important U.S. communications infrastructure, such as cell towers from Huawei, the Chinese technology giant that has become the target of U.S. legal action. The company's chief financial officer, Meng Wanzhou, is currently being held in Canada on U.S. charges of violating sanctions on Iran.

The executive order also comes as Trump's trade war with China shows few signs of reaching a resolution, with both countries levying new tariffs against each other in the past week.

Under the order, the federal government will be able to block foreign technology companies from doing business in the U.S., setting the groundwork for a unilateral ban on Huawei's U.S. business interests. The U.S. government has already banned Huawei phones from military bases as well as the use of some Huawei telecommunications equipment.

The U.S. is not alone in its efforts to stem the growth of Chinese tech companies, particularly Huawei, which is the world's largest supplier of telecommunications equipment. Numerous countries including Australia and Japan have banned Huawei from having any part in the building of next-generation wireless networks known as 5G. Scrutiny of Huawei in the U.S. has also had bipartisan support, with Sen. Mark Warner, D-Va., calling Huawei equipment "extraordinarily dangerous."

But those bans also put countries at risk in falling behind the global race to build new 5G networks, which are seen by experts as the key to a variety of futuristic technologies including self-driving cars. The U.S. is generally considered to be lagging China in the development of 5G technology, though some experts disagree.

Trump has previously called for greater investment in 5G technology.

"American companies must step up their efforts, or get left behind," Trump tweeted in February.