ZTE and Huawei May Be Forced to Cease Operations in the US

• The Donald Trump administration may sign an executive order to block US businesses from purchasing products from ZTE and Huawei.
• The US administration started considering the move after both companies were suspected of spying on the US for the Chinese government.
• The two Chinese companies may also be banned from US network carriers.

The US-China trade relations may take a turn for the worse with the US government suspecting Huawei and ZTE of spying for the Chinese government. President Donald Trump’s administration may ban US businesses from dealing with both the Chinese companies via executive order in the near future.

Banning Huawei and ZTE will mean that their products will no longer be on sale in the US. Huawei is known for its portable routers, mobile phones, and other network equipment while ZTE primarily focuses on networking equipment after its phones failed to garner global reach.

The US government had been persuading its allies to ban equipment from Huawei last month, and with more reports of the Chinese company spying on the US coming in, a ban is imminent at this point unless the company proves its innocence. Huawei’s CFO attempted to prove his innocence in court earlier this month with no success.

The US government may also ban US network carriers from partnering with the two Chinese companies which can hurt both Huawei and ZTE financially. The US is not the only country that wants to ban the two companies with Japan considering a similar executive order as well. There have been a number of US intelligence warnings in the past, and the arrest of the ZTE CFO for fraud has raised suspicions even further.

Unless either company proves its innocence, the political tension between the US and China is set to increase in 2019, and we may see more Chinese products being banned from the country over time. A number of US companies are still reliant on China for manufacturing due to cheap labor costs. However, with reports of Chinese espionage operations having infiltrated up to 30 companies we may see a major shift in how companies in the US operate.

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