The White House is set to curb the import of telecommunications equipment from China to the United States for national security concerns, a competent source told WSJ.
The restrictive action, if approved, is going to affect, among others, Chinese giant telecom equipment manufacturers Huawei Technologies Co. and ZTE Corp.
Pentagon top brass points out that smartphones of the two firms are sold and used at the US military bases around the world, and there are fears that Chinese manufacturers may be installing spy equipment into their smartphones. Huawei and ZTE flatly reject the accusations of espionage.
Among other things, WSJ notes, the ban on the supply of equipment may eventually lead to the fact that US government may decide to refrain from using China-made network equipment. Overall, the move is seen as a part on effort to restrict technology transfers from U.S. firms to China
The final decision on the ban has not yet been taken since the Trump administration is yet to assess all possible consequences.
Earlier this year, the Department of Commerce has banned American companies from selling materials for ZTE, accusing the latter of violating the sanctions regime against North Korea and Iran. Simultaneously, the US Department of Justice stated similar concerns regarding Huawei.
Chinese officials have warned that they will take steps to retaliate if the U.S. intensifies its efforts against firms such as Huawei.
In retaliation, Beijing has blocked, or at least delayed, the important for San Diego-based Qualcomm acquisition of the Dutch chip maker NXP Semiconductors.
A spokesman for the White House National Security Council said officials “have no comment on the matter at this time.”