The Trump administration has issued an executive order apparently aimed at banning Huawei’s equipment from US networks and said it was subjecting the Chinese company to strict export controls.
Huawei would be the largest business ever subjected to the controls, a law enforcement measure that requires it to obtain US government approval on purchases of American technology.
The executive order declares a national economic emergency that empowers the US government to ban the technology and services of “foreign adversaries” deemed to pose “unacceptable risks” to national security.
While it does not name specific countries or companies, it follows months of US pressure on Huawei. The US commerce department now 150 days to come up with regulations.
It comes as Washington and Beijing are locked in a trade war that partly reflects a struggle for global economic and technological dominance.
The export restriction is “a grave escalation with China that at minimum plunges the prospect of continued trade negotiations into doubt,” said Eurasia Group analysts in a report.
“Unless handled carefully, this situation is likely to place US and Chinese companies at new risk,” the report said.
The law invoked in Wednesday’s executive order, the 1977 International Emergency Economic Powers Act, has routinely been used to freeze the assets of designated terrorists and drug traffickers.
The order addresses US government concerns that equipment from Chinese suppliers could pose an espionage threat to US internet and telecommunications infrastructure.
US justice and intelligence officials have presented no evidence, however, of any Huawei equipment in the US or elsewhere being compromised by backdoors installed by the manufacturer to facilitate espionage by Beijing.
Huawei vehemently denies involvement in Chinese spying, and said blocking it from doing business in the United States would hamper the introduction of next-generation communicaions technology.
“We are ready and willing to engage with the US government and come up with effective measures to ensure product security,” the company said in a statement.
Early this year, the US justice department unsealed criminal charges against Huawei, a top company executive and several subsidiaries, alleging the company stole trade secrets, misled banks about its business and violated US sanctions on Iran.
The executive charged is Huawei’s chief financial officer, Meng Wanzhou, who is also the daughter of the company’s founder.