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Trump extends U.S. telecom supply chain order aimed at Huawei, ZTE

Reuters

U.S. President Donald Trump has extended for another year an executive order declaring a national emergency and barring U.S. companies from using telecommunications equipment made by firms posing a national security risk.

The order invoked the International Emergency Economic Powers Act, which gives the president authority to regulate commerce in response to a national emergency that threatens the United States. U.S. lawmakers said President Trump’s May 2019 order was aimed squarely at Chinese companies such as Huawei Technologies Co. and ZTE Corp.

The U.S. Commerce Department is expected to again extend a license allowing U.S. companies to keep doing business with Huawei, a person briefed on the matter said.

The department has issued a series of extensions of the temporary license and previously extended it until April 1. Huawei, the world’s second-largest maker of smartphones, is also a major telecommunications equipment company that provides 5G network technology.

In March 2020, the Commerce Department sought public comments on whether it should issue future extensions and asked what was the “impact on your company or organization if the temporary general license is not extended?” The department also asked about the costs associated with ending the licenses.

Wireless trade association CTIA urged the department to approve a long-term license extension, writing that “now is not the time to hamper global operators’ ability to maintain the health of the networks.”

The group argues 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.”

It also asked the Commerce Department to “reinstate and modify its prior authorization for standards development work to allow for exchanges with Huawei in furtherance of global telecommunications standards.”

Since adding Huawei to an economic blacklist in May 2019, citing national security concerns, the department has allowed it to purchase some U.S.-made goods in a move aimed at minimizing disruption for its customers, many of which operate wireless networks in rural America.

In November 2019, the Federal Communications Commission designated Huawei and ZTE as national security risks, effectively barring their rural customers in the United States from tapping a U.S. $8.5 billion government fund to purchase equipment.

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