The Commerce Department has announced that Huawei Technologies Co. Ltd will be added to its “Entity List”.
The company cannot acquire components or technology from any firm in the U.S. without getting approval from the government.
An executive order signed on Wednesday claims that telecom equipment made by companies that come under the new executive order and pose a severe risk to national security. They may offer sensitive communication from the U.S. to spies.
The ban on telecom gear that provides spying risk to the U.S. has further strained U.S-Sino talks. Though Huawei or China is not specifically mentioned, Huawei is considered as the intended target for the executive order against foreign adversaries.
This order comes under a critical time when the two world’s largest economies are undergoing important talks about the ongoing trade battle. The two economies have been affected by the prolonging war.
The President has brought the ban under the International Emergency Economic Powers Act. This executive order declares all business dealings with foreign adversaries as a national threat. It allows the Department of Commerce of the U.S. to take enforcement efforts.
In a statement from the White House, the press secretary has stated that the president will take all efforts to keep Americans safe and protect the country from all foreign adversaries.
They are “unreasonable restrictions” cries out Huawei. The company says it is willing to come up with adequate product security by engaging with the U.S. government.
Huawei released a statement saying that this restriction on telecom products will bring down the progress of the U.S. in 5G deployment and will limit the country to inferior and expensive alternatives.
However, Huawei Executive Director David Wang says that with the restrictions, the company’s business prospects will not be affected. Already the company has been fighting for about a decade against accusations that it helped in Chinese spying.