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US President Trump Adds Second Year to Huawei, ZTE Ban

U.S. President Trump just extended a 2019 executive order to ban domestic companies' use of telecommunications technology from Huawei and ZTE.

U.S. President Donald Trump extended for a second year an executive order signed May 2019 announcing a national emergency and forbidding U.S. companies from employing telecommunications equipment produced by firms deemed a national security risk, according to a Reuters report.

RELATED: HUAWEI BAN THREATENS NATIONAL SECURITY, SAYS GOOGLE

Trump extends Huawei, ZTE ban for second year

Trump's original order invoked the Emergency Economic Powers Act that allows a sitting president to regulate commerce unilaterally in response to perceived national emergency threats to the United States. Lawmakers in the country said Trump's 2019 order was designed to affect Chinese companies like ZTE Corp. and Huawei Technologies Co.

The U.S. Commerce Department is also due to extend a license — expiring Friday — that allows U.S. firms to continue business with Huawei, according to a person briefed on the matter, reports Reuters.

The department previously declared a series of extensions of the short-term license, with the last extension happening April 1. The second-largest manufacturer of smartphones and based in Shenzhen, Huawei is a giant telecoms equipment company providing 5G network technology.

Last December, China answered Trump's ban with a reciprocal ban for Chinese companies to use U.S. telecommunications equipment.

Huawei saw growth despite ban, domestic lawsuits

Despite the ban, Huawei saw a 23% growth in the first half of 2019, a $58 billion increase in profit margins. At the time, the company's Chairman Liang Hua said the U.S. ban had "some impact on our business," mostly in the sector of "intelligent computing and on [the company's] server and consumer business in non-China markets," however the general impact during the first half of last year was said to be insubstantial, according to the chairman.

Additionally, the initial U.S. ban on Huawei and ZTE products caused some domestic companies — including FedEx — to file lawsuits against the U.S. government last June.

The U.S. Commerce Department solicited public comments on whether it should declare future extensions, asking what the "impact on [a U.S.-based] company or organization if the temporary license is not extended?" The department also requested to know what costs to expect should the licenses end.

UPDATE May 14, 2:30 PM EDT: Trade association urges 'long-term' license extension

The wireless trade association called CTIA pushed for the U.S. department to approve a "long-term" extension to the license, arguing that "now is not the time to hamper global operators' ability to maintain the health of the networks."

The commercial group added that "ongoing, limited engagement with Huawei to protect the security of equipment and devices in the market benefits American consumers by reducing the risk that they will be subject to device compromise."

Additionally, the group asked Commerce to "reinstate and modify its prior authorization for standards development work to allow for exchanges with Huawei in furtherance of global telecommunications standards."

As of yet, there has been no public comment from either Commerce Department or Huawei.

UPDATE May 14, 3:00 PM EDT: Huawei ban's effects on U.S. rural customers

Since Huawei was added to the United States' economic blacklist in May 2019, the department made allowances for the company to make purchases of some U.S.-made goods in a policy move designed to minimize domestic commerce disruption for customers, many of whom use wireless networks throughout rural America, reports Reuters.

Last November, the Federal Communications Commission said Huawei and ZTE were national security risks, which barred rural customers in the U.S. from using an $8.5 billion government fund to buy equipment.

Head of the Competitive Carriers Association Steven Barry said to a congressional hearing in March 2020 that rural carriers were "essentially attempting to rebuild the airplane in mid-flight" by making providers remove and replace network equipment.

 

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