Trump Bans Huawei And ZTE
United States President Donald Trump has spelt the death knell for ZTE and Huawei with US Federal Departments banned from using or buying the Chinese makers products.
The ban which is part of the Defense Authorization Act bans phones and parts produced by Huawei and ZTE from being used by United States government or anyone who wants to work with the government.
The impact for government agencies and contractors who who currently use Huawei and ZTE technology could be massive as it comes into effect over the next two years claim analysts.
The brands will be banned from providing components or services that are “essential” or “critical” to the system they are used in. In the case that a component cannot be used to route or view data the components could be cleared for use.
Huawei and ZTE had been identified as threats by the US government as early as a 2012 House report. This assessment has the support of US security agency heads, who have publicly recommended people against using products from either company.
Businesses who work with the government are going to be the biggest losers from this decision as the cost of replacing parts could be very high and time consuming.
To curb the impacts, the US government will providing funding to allow businesses to pay for the technology they must replace.
Debates within the Republican Party had observers confused about how hard the government would come down on Chinese manufacturers, particularly given Donald Trump’s role in both shouting down Chinese companies while simultaneously publicly supporting lifting trade bans on ZTE specifically.
These contradictions will continue to put pain on the federal government’s position and complicates the issue for allies such as Australia who are struggling to find appropriate responses to Chinese tech companies landing government contracts.
Earlier in the year the US Senate passed an amendment reinstating a trade ban on ZTE, though it failed to pass the House and as a result was dropped for the time.