Report: Trump Admin Considering Ordering All US 5G Gear Be Made Outside of China
That would be a significant step above and beyond moves already taken by the White House which is locked in a trade war with China and has begun imposing sanctions on Chinese tech companies on allegations that they pose a security risk (most notably Huawei, the world’s largest manufacturer of telecom equipment). While the U.S. has already effectively banned the use of Chinese telecom gear by American carriers, the Journal writes that U.S. officials have begun inquiring whether other suppliers based outside of China can move their production chains for U.S.-bound gear totally outside the country. That’s a process that could take “months or years” to kick in, writes the Journal:
A White House executive order last month to restrict some foreign-made networking gear and services due to cybersecurity concerns started a 150-day review of the U.S. telecommunications supply chain. As part of that review, U.S. officials are asking telecom-equipment manufacturers whether they can make and develop U.S.-bound hardware, which includes cellular-tower electronics as well as routers and switches, and software outside of China, the people said.
As the Journal noted, such a requirement would force European companies Nokia Corp. and Ericsson, which currently dominate the sales of equipment to U.S. wireless carriers, to move their operations out of China or potentially lose access to the American market. That could potentially have a bigger impact on the market than any deal to end the ongoing trade standoff, as it may permanently alter the global technology markets—though both Nokia and Ericsson have already started working on plans to pull out of China due to the Trump administration’s escalating trade war tariffs.