U.S. Officially Blacklists Huawei (Updated)

Posted on May 16, 2019 by Paul Thurrott in Cloud with 29 Comments

Updated: Huawei has provided a statement which I’ve added to the end of the article. –Paul

As part of a trade war with China, the United States government formally added Huawei to its Entity List, barring it from doing business with any company based in the United States.

The blacklisting happened in a two-step process. First, the president of the United States signed an executive order—that didn’t name China, Huawei, or any other China-based firms—that bars U.S.-based companies from using telecom gear from sources the administration believes are threats national security. Then, the U.S. Commerce Department formally added Huawei and numerous Huawei partners to the Entity List, so that it will be covered by the executive order.

As you might imagine, the U.S. government backed up its move—which included declaring a national emergency—with some solid evidence against Huawei. This evidence includes [this sentence intentionally left blank because there is no evidence].

China, predictably, reacted with outrage, and described the blacklisting as “a wrongful action.”

“China has always stressed that the concept of national security should not be abused,” a China Ministry of Commerce spokesperson said. “It should not be used as a tool to push forward trade protectionism.”

Huawei, which had to be expecting this move, appears resigned to the inevitable.

“Restricting Huawei from doing business in the U.S. will not make the U.S. more secure or stronger,” a Huawei statement notes. “Instead, this will only serve to limit the U.S. to inferior yet more expensive alternatives, leaving the U.S. lagging behind in 5G deployment.”

In addition to hurting Huawei and other big Chinese firms, this action will also harm big U.S. technology firms like Qualcomm and Broadcom that do business with companies in that country. And as CNN notes, the order could also harm smaller American telecom companies, especially those in rural and underserved areas, that rely on low-cost providers like Huawei.

“We’ll just have to see what it is and we’ll have a definite reaction one way or another,” the CEO of a small network that uses Huawei gear told CNN. “Because when all this equipment went in there was no talk of these issues. [Will] there be help to replace it?”

In addition to the blacklisting, the U.S. government is also petitioning its allies to ban Huawei from their national 5G infrastructures, and it has seen some mixed success, with many countries in Western Europe, plus Canada, Australia, and New Zealand, reevaluating their use of Huawei equipment. But many have likewise complained about the lack of evidence, and some countries, like the UK, have pledged to allow Huawei to participate going forward under ongoing security reviews.

The fears about Huawei are centered on one point only: It is based in China and there is a belief—which both Huawei and China have denied, repeatedly—that it is required to work hand-in-hand with Chinese security services. In other words, many believe that the Chinese government could compel Huawei to use its products to spy on the West.

“China’s main export is espionage, and the distinction between the Chinese Communist Party and Chinese ‘private-sector’ businesses like Huawei is imaginary,” Senator Ben Sasse said this week.

In response to these allegations, Huawei this week offered to sign no-spy agreements with Western governments and argued that spying on behalf of any government, China or otherwise, would effectively end its ability to compete globally.

“Huawei is the unparalleled leader in 5G,” a Huawei statement provided to Thurrott.com reads. “We are ready and willing to engage with the US government and come up with effective measures to ensure product security. Restricting Huawei from doing business in the US will not make the US more secure or stronger; instead, this will only serve to limit the US to inferior yet more expensive alternatives, leaving the US lagging behind in 5G deployment, and eventually harming the interests of US companies and consumers. In addition, unreasonable restrictions will infringe upon Huawei’s rights and raise other serious legal issues.”

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