February 11, 2019
Joel Hruska

Trump May Sign Executive Order to Ban Huawei, ZTE Telecom Equipment

The ongoing trade war between the United States and China could heat up next week if President Trump signs an executive order banning telecommunications equipment manufactured by ZTE or Huawei from being deployed in US wireless networks.

While such an order has been rumored before, Politico reports that there’s a push to make it happen before Mobile World Congress, which runs at the end of February. The goal is to send a message to firms looking to do business with the US government that they need to prioritize cybersecurity concerns.

“Contracts are going out now,” a senior official told Politico. “Extra stigma could change the situation out in the countries on this major decision.”

“We’re going to be asking people to do things, but the U.S. legal and regulatory environment hasn’t really closed the circle yet on this issue,” said Paul Triolo, who leads the consulting firm the Eurasia Group’s global technology practice, in the report. “So there’s a lot of pressure now to get this EO out there.”

There are telling quotes later in the story that point to problems with this approach: Namely, neither the US nor its corporations have come up with a plan for actually avoiding the use of equipment from the two companies. Huawei controls 28 percent of the global telecom market. That doesn’t make it impossible to avoid any hint of the company’s products, but there are obviously concerns related to doing so.

The one thing we don’t have in all of this back-and-forth is a detailed technical explanation of exactly why Huawei equipment should be avoided. This has been a topic of some discussion around the ET water cooler. Of our staff, I’d say I’m the individual most likely to believe the government has evidence it hasn’t publicly shared that has led it to make these recommendations. It should be noted that while the Trump administration has banged the drum more loudly about cybersecurity concerns related to certain foreign companies than the Obama administration did, questions about firms like Huawei and the Russian antivirus firm Kaspersky Labs substantially predate the Trump administration.

The DOJ indictments against Huawei for allegedly stealing T-Mobile technology and evading sanctions against Iran are broadly similar to those made against ZTE. Then again, President Trump interceded to protect ZTE from being destroyed when the United States initially levied sanctions against that company. And while both technology theft and evading sanctions are very serious crimes — I argued in favor of banning ZTE from purchasing products from US companies back when those sanctions were initially announced — none of the public allegations from the US government have argued that 5G equipment from Huawei is backdoored or otherwise compromised in a specific way that would explain the blanket ban on products from those companies. The references to ongoing security concerns that the government has communicated have always been vaguer than a direct claim that the company has engineered its products to steal data directly.

The closest we’ve gotten to the kind of technological smoking gun many have hoped for was Bloomberg’s report on supposedly compromised Supermicro servers that pointed towards espionage operations taken against US companies at the manufacturing level. Yet here, I have to admit, my own instincts may have been mistaken. No one was ever able to corroborate Bloomberg’s claims. No audit or examination of Supermicro hardware ever found evidence of the kind of chips Bloomberg claimed had been inserted into the hardware platforms.

The government has raised concerns regarding Huawei dating back to at least 2012. Presumably, it has good reasons for doing so. But it would be useful to know the nature of these suspicions and the basis for them more accurately than we do if only to better gauge the risks individual consumers run when they use hardware manufactured by these firms.

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