Huawei and ZTE technology will largely be banned from use by the US government and government contractors. The ban was signed into placed by President Trump today as a component of the much larger Defense Authorization Act.
This caps off months of will-they-won’t-they from Republicans, many of whom view the two major Chinese telecoms as national security threats. In June, the Senate overwhelmingly passed an amendment that would have reinstated a trade ban on ZTE, potentially shutting down the company. The House, however, did not, and the big question was how the two chambers would find a compromise — or if they would drop the matter entirely.
In the end, Congress decided on a measure that will essentially ban the US government or anyone that wants to work with the US government from using components from Huawei, ZTE, or a number of other Chinese communications companies. The ban goes into effect over the next two years.
The ban covers the use of Huawei and ZTE components or services that are “essential” or “critical” to the system they’re used in. Some components from these companies are still allowed, so long as they cannot be used to route or view data. The bill also instructs several government agencies, including the Federal Communications Commission, to prioritize funding to assist businesses that will have to change their technology as a result of the ban.
In an emailed statement, Huawei called the ban a “random addition” to the defense bill that was “ineffective, misguided, and unconstitutional.” Huawei said the ban would increase costs for consumers and businesses, and that it failed to “identify real security risks or improve supply chain security.” Huawei didn’t immediately say that it would challenge the law.
It was unclear which direction Congress would go with this, particularly because Trump did not want to reinstate the trade ban on ZTE — and even worked to lift it. The Commerce Department has already negotiated a deal and lifted the ban, and it was unclear if Trump would sign a bill reversing those decisions.
Huawei and ZTE have long been in the crosshairs of US law- and policymakers. Both companies were called a national security threat by a 2012 House report, while heads of US security agencies have recommended against using both companies’ products. While this bill doesn’t outright ban either company from US infrastructure, it could have a major impact by forcing the many, many companies that want to work with the government to pick other suppliers and remove the Huawei and ZTE components they’re already using.