In the latest chapter of our US government versus Huawei, ZTE, and the Chinese government, President Trump is reported to be considering an executive order that would invoke the International Emergency Economic Powers Act, granting our president the authority to regulate commerce in response to a national emergency that threatens the United States. The threat being that the Chinese government is using ZTE and Huawei telecommunication equipment to spy on America.
While those familiar with the White House’s plans state that ZTE and Huawei won’t be specifically mentioned in the order, a source says that it is expected commerce officials would interpret it as authorization to limit the spread of equipment made by the two companies.
Meanwhile, ZTE and Huawei already have plenty of equipment installed through our country, most notably in rural regions. In fact, Huawei’s vice president for sales of Huawei Tech USA, is on the board of directors of the Rural Wireless Association. RWA represents carriers with fewer than 100,000 subscribers and it estimates that 25% of its members have Huawei or ZTE equipment in their networks. If the reported executive order comes and states that this equipment must be replaced, it’s estimated that the cost of such work would be $800 million to $1 billion for all RWA members to replace their Huawei and ZTE equipment.
I get the feeling we’ll be hearing more about this during CES in a few days. We’ll keep you posted.
// Reuters | CNBC