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Will Trump Fan the Flames as Huawei Is Burned at the Stake?Will Trump Fan the Flames as Huawei Is Burned at the Stake?

An 'executive order' banning Chinese networking technology from US communications networks is imminent, according to Politico – such a posturing move would be bad for everyone.

February 8, 2019

6 Min Read
Will Trump Fan the Flames as Huawei Is Burned at the Stake?

It was always possible that, in an act of political showboating, the Trump administration might officially ban the deployment of Chinese communications networking technology from US networks for security reasons. And now, it seems, that might happen in the days leading up the MWC2019, according to Politico, which cites three sources in its story, "Trump likely to sign executive order banning Chinese telecom equipment next week."

Such a move had already been highlighted late last year by Reuters. (See Trump to Ban Huawei, ZTE in US in January?)

Our analysis of that development lays out the fractious track record that both Huawei and ZTE have had with the US authorities, so there is no need to repeat it here. In a nutshell, the two Chinese firms are pariahs.

Issuing an executive order as outlined by Politico and Reuters would certainly appease those who want to see Chinese technology (or any?) firms vilified and labelled as a threat. Mud sticks, especially if it's thrown many times. Such an order would be enough to convince the weak-minded that, without doubt (or evidence), Huawei and ZTE are indeed a security threat to the US, an accusation that is bandied about so freely.

But, in my view, such an order would benefit only those who profit from a spike in social media traffic.

It would either have no impact or, indeed, be harmful to everyone else -- including the US.

Here's why.

First, banning Huawei and ZTE -- which is, essentially, what such an order would do -- would make no difference to the major network operators such as AT&T, Verizon, T-Mobile and Sprint, as well as the major cable operators. Because none of them are currently deploying that Chinese technology anyway: If they did, it would hit them financially, as they'd pretty much be giving up any possibility of winning lucrative federal communications services contracts and likely also lose some enterprise and even consumer business.

Essentially, Huawei and ZTE are already excluded from that market -- it's just that, currently, it's not official -- there is no Presidential thumbprint.

It would, though, cause a headache for, and impact the business of, the small number of local, small network operators that have selected Huawei network gear because it's been affordable and suits their purposes.

So the impact of such an order would be negative to some US companies but have no other discernible impact: It would not make the US more secure.

What that order would do, though, is pour fuel on the flames already licking at the foot of the political pyre upon which the names of Huawei and ZTE have been tossed. It would hammer home the message that Chinese tech firms are enemies of the US, companies that want to help China spy on American businesses and hard-working people. It would worsen relations between the US and China and put pressure on US allies to pick sides.

But what are the likely outcomes here? What would happen next?

Here are a few strong possibilities.

In the very near term, it would politicize this year's MWC. That event does not need to be made any harder for the companies and people that spend a lot of money heading to Barcelona to try to do business. It would drive everyone to Rioja and albondigas even earlier than ever: Important conversations would be interrupted, or never begin, because 'the Huawei situation' would need to be discussed. It is already, reportedly, on the (behind the scenes) agenda. (See GSMA set for a crisis meeting at MWC over Huawei bans -- report.)

I would imagine that, even more quickly, it would lead to a greater volume of cyber attacks on the US from the Far East. I am guessing here, but it's not hard to imagine that some digital retribution would be sought, either by independent agents looking for an excuse to attack US institutions or by more organized groups. A Trump order would invite efforts to try and breach US cyber defenses -- that is frighteningly obvious, right? And it could result in serious disruption, cost and interference. Which is sad.

It would also increase the chances of retaliation from the Chinese government, and that would directly impact US companies in a negative way. It can only make things worse. Again, that's sad.

And it would likely lead to greater R&D and facilities investment in China and elsewhere in Asia to strengthen local markets and boost the capabilities of Chinese technology companies in an effort to make them even more competitive in non-US markets.

This is all bad news for the US.

Figure 1:

What is the upside for the US and US companies from such an executive order? Please feel free to suggest some on the message boards below because I can't identify any.

I hope this executive order never becomes a reality. There is nothing to gain from it for anyone other than table-thumping politicians.

And before the abuse begins, I will repeat here what I have written before: The Chinese companies are not angels. They are not blameless. They carry out the same sort of industrial espionage as (actually, possibly worse than) other companies. Some of them break international trade agreements and try to cover their tracks as they seek to do 'bad' business. And they're not good at getting away with it.

But companies that are guilty of one thing are not necessarily guilty of others. It's non-sensical. Just because Company A breaks international trade embargos and tries to illicitly get the lowdown on its competitors' developments doesn't mean it's going to open up its software to government spies.

Of course, the Chinese government is not helping the cause of either Huawei or ZTE by effectively ordering its citizens to undertake any task required by the state -- that only leads to more fervent accusations of malfeasance.

And, here's a thought. If the Chinese government wanted to tap into US communications networks, would using a Chinese technology company already suspected of being a security threat as a conduit make sense? Or would it be better to infiltrate a trusted company and tap into the networks that way? These intelligence operations are sometimes clever and sneaky, you know.

I hope this rumored executive order doesn't exist or become official. The world is a better and more peaceful place without it. Huawei and ZTE are already feeling the heat around the world -- President Trump doesn't need to fan the flames. If he does, though, it's possible the US might suffer a backdraft.

— Ray Le Maistre, Editor-in-Chief, Light Reading

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