What happened: President Donald Trump is reportedly considering an executive order that would limit US carriers and companies from purchasing network equipment from foreign companies that pose a threat to national security. The order would include prohibitions on purchasing equipment from China’s Huawei and ZTE. The order has reportedly been developing for over eight months and may be issued early next year.
Why it’s important: The executive order to ban Chinese telecom equipment most likely would escalate the trade tensions between the US and China. Over the past year, the US has been urging its allies to shut Huawei and ZTE’s out of their 5G deployment plans. The two Chinese telecom equipment manufacturers have come under scrutiny for their close ties to Beijing, which many suspect would make their network equipment vulnerable to interference and surveillance. Huawei’s 5G network gear is now banned in several countries including Australia and New Zealand. ZTE was slapped with a seven-year sales ban by the US government earlier this year for violating Iran sanctions. The ban was lifted after the company paid a hefty fine and agreed to overhaul its top management.