Trump 'considering' formal US ban on Huawei and ZTE

(Image credit: Huawei)

Huawei’s struggle to convince the US that it is not a threat to national security could take a turn for the worse should President Donald Trump elect to issue an executive order that would effectively ban operators in the country from using the Chinese manufacturer’s equipment.

Reuters reports that such an order has been under consideration for more than eight months but could be formally enacted this month.

It is said the order would not name Huawei or its compatriot ZTE by name but would give the US Department of Commerce scope to ban any supplier it suspects of being a threat to national security.

Huawei in the US

The US has long been suspicious of Huawei, claiming the company aids Chinese state-surveillance. Huawei has repeatedly denied such allegations and although it is effectively been frozen out of the race to supply major US carriers, it is an important partner for several smaller US networks because its products are cheaper.

Huawei even has a representative on the board of the Rural Wireless Association (RAW), which represents operators with fewer than 100,000 subscribers and is concerned about the potential impact of such a ban.

It is thought that a quarter of RWA members use kit made by Huawei or ZTE and that the cost of removing and replacing the equipment could be as high as $1 billion. There is no news on whether compensation would be offered to help with the transition.

Despite these apparent hostilities, Huawei has never given up hope of cracking the US market, telling the US Federal Communications Commission (FCC) that any ban would give other nations the lead in 5G development.

A filing noted that Huawei generates 60 per cent of its revenue outside China and that it sells products to more than 500 operators in 170 countries without issue – including the US.

Should it continue to be frozen out of the US market, it says that prices will rise, harming consumers and harming innovation. Ultimately, it claims, this could delay 5G rollout and hand the momentum to global rivals like China.

EE, O2, Vodafone and Three are all customers in the UK but other counties are becoming increasingly wary of Chinese influence on telecommunications infrastructure. This includes Australia, which has introduced a formal ban and the Czech Republic.