U.S. Said to Prepare Trump Order to Restrict Chinese Telecoms

The Trump administration is preparing an executive order that could significantly restrict Chinese state-owned telecom companies from operating in the U.S., according to Bloomberg, citing people familiar with the matter.

The order, which hasn’t yet been presented to the president, would not mention companies such as Huawei or ZTE by name and would not outright ban U.S. sales by the firms. But it would give greater authority to the Commerce Department to review products and purchases by companies connected to adversarial countries, including China, one of the people said.

Huawei is pushing to take a global leadership position in 5G, but many American officials suspect the company’s products could be used by Beijing to spy on Western governments and companies. Both Huawei and ZTE have also been targeted by the U.S. for alleged schemes to dodge American sanctions on Iran.

Rumors have abounded that the Trump administration would target Chinese telecom companies with an executive order to ban their U.S. sales. Reuters reported in December that Trump would consider an order declaring a national emergency related to the firms.

Some U.S. companies are preparing for a possible executive order in the next few weeks that could inflict serious harm on Huawei, perhaps making it impossible for the company to operate, according to James Mulvenon, a China specialist who works for defense-contractor SOS International of Reston, Virginia. “The maximal version is that they would have a death sentence for Huawei like they threatened to do to ZTE. The minimal version is that Huawei will be banned from sales in the U.S.“

An order could be presented to Trump as soon as next month, according to one person familiar with the discussions who asked not to be identified. The order the person outlined would give the Commerce Department discretion to decide which companies and which products to scrutinize. The preparation of the order comes against the backdrop of Trump’s trade war with Beijing. But national security, not economic concerns, are driving the discussion, the person said.