U.S. Moves to Block Sales by Chinese Telecom Equipment Makers
The United States undercut China’s technology ambitions on Tuesday, advancing a new rule that would limit the ability of Chinese telecommunications companies to sell their products in this country.
The Federal Communications Commission voted unanimously to move forward with a plan that would prevent federally subsidized telecommunications carriers from using suppliers deemed to pose a risk to American national security. The decision takes direct aim at Huawei, which makes telecommunications network equipment and smartphones, and its main Chinese rival, ZTE, sending a message that the government doesn’t trust them.
A day earlier, the government barred ZTE from using components made in the United States, saying the company had failed to punish employees who violated American sanctions against North Korea and Iran.
The moves intensify an already testy fight between China and the United States for high-tech supremacy. Although tensions have simmered for years, the two economic powerhouses are threatening a global trade war as they look to protect their most advanced industries.
Long bedeviled by political concerns about its ties to the Chinese government, Huawei (pronounced “HWA-way”) has spent the better part of the last decade trying to sell its equipment and phones in the United States.
The company made a big push in the United States with a new line of smartphones this year. But that effort was derailed when AT&T, appearing to bow to government security concerns, walked away from a deal to sell the devices.
Since then, Huawei has signaled that its political battles in Washington may be all but lost. The company has been dialing back on government outreach in the United States, including lobbying, and last week it cut key staff there, according to people familiar with the matter. The new F.C.C. rule, which would become final with a second vote, could kill off what little equipment business Huawei has in the United States.