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Huawei hints at legal retaliation to Trump executive order

18 May 2019

On May 15, the United States upped the ante yet again in its economic disputes with China.

Huawei said it supplies 45 of the world's top 50 phone companies, but only about 2 percent of telecom equipment purchased by North American carriers in 2017 was Huawei-made.

"This will prevent American technology from being used by foreign-owned entities in ways that potentially undermine USA national security or foreign policy interests", Commerce Secretary Wilbur Ross said.

A broad U.S. crackdown, announced on Wednesday in an executive order, was the latest shot fired in an escalating trade war that is rattling financial markets and threatens to derail a slowing global economy.

The Commerce Department on Wednesday announced it would add Shenzhen, China-based Huawei and its subsidiaries to a USA "entity list" - meaning it can keep Huawei from buying us technology if "the sale or transfer would harm USA national security or foreign policy interests". Just $5 a month. Following the action, the Commerce Department specifically named Huawei as a company that potentially undermines USA national security.

"Our perspective is not to block Huawei or any company, it is to preserve our national security and European sovereignty", Macron commented, indicating his opposition to the launch of technological or trade wars.

Foreign ministry spokesman Lu Kang, asked if China had invited USA officials for more talks, said China always advocated resolving disputes through dialogue. We are ready and willing to engage with the U.S. government and come up with effective measures to ensure product security.

It's also telling that Trump's order came after trade talks with China failed. This list is reportedly for companies that the US government deems to be undermining USA interests.

Washington lawyer Douglas Jacobson, a trade expert, said there would be collateral impact on the US companies that sell to Huawei.

Trump also urged China to buy more US farm products.

The steps taken against Huawei this week raise obvious parallels to last year's "death sentence" on another Chinese ICT firm, ZTE.

Dearlove, who spent 38 years in British intelligence, said it was deeply worrying that the British government "appears to have made a decision to place the development of some its most sensitive critical infrastructure" in the hands of a Chinese company.

What has President Trump done? Accordingly, there's some speculation that the Huawei gambit is meant mostly as a negotiating card - that Trump is hoping he can do Xi another "favor" (as he described the ZTE reversal) in exchange for concessions in the trade negotiations.

And that's what the commerce department is doing to Huawei under the act.

The other big backdrop to this week's measures is the ever-escalating trade war.

5G's importance to emerging industries and its reliance on a complex mixture of software and hardware have countries like the USA anxious that adversaries could easily hack the networks to access user data and divert communication traffic to their own servers.

For instance, Gao Feng, a spokesperson for the Ministry of Commerce, told reporters, "The two sides had open and constructive communication during the 11th round of the China-U.S. high-level economic and trade consultations".

"What these trade negotiations could mean for us is that maybe then the USA government would be willing to talk with us", he said.

"We didn't even know there was this decision until members of the press received a statement Wednesday night", says on industry representative who declined to be named because they were not authorized to speak publicly. The global community bears witness to all this.

Trump, citing national security concerns, signed an executive order that's expected to bar USA imports of equipment made by Huawei and another Chinese company, ZTE Corp. Huawei has repeatedly denied this.

Huawei hints at legal retaliation to Trump executive order