Trump Mulling Order That Prohibits US Companies From Handling Huawei Report
President Donald Trump was able to issue an executive order that would ban US companies from purchasing telecommunications equipment made by companies such as Huawei Technologies and ZTE Corp, according to a Reuters report, a move that could put further pressure on US-China trade relations.
Reuters said the order, which could be issued as early as next month, would allow the Department of Commerce to block the purchase of telecom equipment from non-US companies at risk of national security. Trump signed a $ 716 billion bill, earlier this year, which imposed some limitations on foreign purchases, but lifted a ban that prevented ZTE from dealing with US vendors, partly because of allegations that it had violated Western sanctions against Iran and North Korea.
Advanced Micro Devices AMD), stocks that supply chips to Huawei's MateBook D tablet, were marked 2.07% lower in pre-trading on Thursday, indicating an opening clock price of $ 1[ads1]7.53 while Micron Technology (MU) shares were seen at 2.23% lower at $ 30.26 each. Intel Corp. (INTC), which announced that it had carried out some 5G network tests with Huawei in early December, was marked 0.74% lower at $ 45.85 each. Qualcomm Inc. (QCOM), another Huawei provider, was marked 1.57% lower at $ 55.08.
Huawei, the world's second largest smartphone maker behind Samsung Electronics, said today it will likely see a 21% increase in 2018 revenue, to just under $ 100 billion, after shifting 200 million units worldwide despite restrictions from the USA, Australia and New Zealand.
The company's CFO, Meng Wanzhou, also known as Sabrina, was arrested and bailed out in Canada earlier this month and returns extradition to the United States. She was supported by Chinese companies to avoid Iran's sanctions being imposed.
The arrest drew heavy criticism from Beijing, and China's Foreign Ministry urged US Ambassador Terry Branstad to complain that "US acts severely violated the legitimate and legitimate rights of Chinese citizens, and by their very nature were extremely ugly," which caused concern that
ZTE, for its part, is estimated to have paid more than 200 US vendors as much as $ 2.3 billion last year, including $ 100 million each for Qualcomm, Broadcom Inc (AVGO) Texas Instruments (TXN) and Intel .
The Chinese government considers the ICT sector as a "strategic sector", according to a US-China Economic and Security Review Commission study published earlier this year, and has invested significant state capital and influence on behalf of state-owned (information and communications technology companies) over the past 20 years.
In 1997, for example, computers and telecommunications equipment, electrical equipment and associated machinery imports from China accounted for about one third of the total. Last year, the same product group measured 54% of the US trade deficit of $ 375 billion.
"The US government needs a national strategy for supply chain risk management of commercial supply chain vulnerabilities in US federal information and communications technology, including procurement related to China," the report said.