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Trump To Sign Order Banning Chinese Telecom Equipment Next Week

Courtesy of ZeroHedge. View original post here.

What is a quick, efficient way for Trump to signal to China, ahead of the upcoming March 1 deadline to reach a trade deal with Beijing, that contrary to media speculation that the US president will "drop tariffs without any concessions" from Beijing, he will do no such thing? One way is by signing an executive order banning Chinese telecom equipment from US wireless networks just a few days before March 1. And, according to Politico, that's exactly what Trump plans on doing, right before a major industry conference at the end of February, and also just before the March 1 deal deadline.

According to three sources, the administration plans to release the directive, part of its broader effort to protect the U.S. from cyber threats, before MWC Barcelona, formerly known as Mobile World Congress, which takes place Feb. 25-28; the actual signing of the long-delayed order may take place as soon as next week.

“There’s a big push to get it out before MWC,” said an industry source familiar with the matter, who also requested anonymity to speak candidly.

By signing the order ahead of the world’s largest conference for the wireless industry, the White House hopes "to send a signal that future contracts for cutting-edge technology must prioritize cybersecurity." The order will surely also further roil the Trump administration’s already tense relationship with Beijing, especially if the U.S. push erodes Chinese firms’ significant European market share.

The reason behind the White House's push is because with many countries eager to deploy next-generation 5G wireless networks to power the rapidly proliferating internet of things, Chinese firms such as Huawei and ZTE are aggressively pushing to build these networks — at a lower cost than virtually all of their competitors. And so, with these 5G build-outs looming, Trump admin officials want “to move the needle” with their security messaging, said the source close to the administration.

“Contracts are going out now,” this person told POLITICO. “Extra stigma could change the situation out in the countries on this major decision.”

“We’re going to be asking people to do things, but the U.S. legal and regulatory environment hasn’t really closed the circle yet on this issue,” said Paul Triolo, who leads the consulting firm the Eurasia Group’s global technology practice. “So there’s a lot of pressure now to get this EO out there.”

While the White House did not comment for the Politico report, National Security Council spokesman Garrett Marquis effectively confirmed the story, stating that the U.S. was “working across government and with our allies and like-minded partners to mitigate risk in the deployment of 5G and other communications infrastructure.”

Ironically, the order which is also meant to drum up support against Chinese 5G technology against US allies, may result in the latest diplomatic schism with Europe. Earlier today, in what was most likely a sign of defiance at the Trump administration, Handeslblatt reported that – in direct contravention with White House signaling – the German government wants to avoid excluding products offered by Huawei the build-out of the next generation 5G network in Germany. Government sources had told Reuters that German ministers on Wednesday discussed how to safeguard security in future 5G mobile networks, amid intense debate over whether to shut Huawei out of the market. To this chancellor Merkel responded that Germany "needs guarantees" that Huawei would not hand data to the Chinese state before it can take part in building fifth-generation networks that would link everything from vehicles to factories at far greater speeds.

It wasn't immediately clear just how Huawei can "guarantee" that it would put a Chinese Wall, pardon the pun, between its operations and Beijing. Huawei has set up information security labs in Germany and Britain aimed at building confidence that its equipment does not contain "back doors" exposing networks to cyber spies and on Wednesday offered to build a similar center in Poland. So far nobody has determined that these labs are spy centers themselves.

So even with Germany preemptively declaring a mutiny to a US-led effort for a global boycott of Huawei, State Department officials are warning their foreign counterparts about 5G security as often as possible according to Politico.

“We’re raising it at the highest diplomatic levels,” Rob Strayer of the State Department said Wednesday during an event at the Center for Strategic and International Studies. “We’re making sure that the most senior policymakers in governments are aware of the momentousness of this decision and what is at stake in the decision they’re about to make.”

But where the situation gets tragicomic is that while Washington is eager to ban Huawei technology, the U.S. still hasn’t developed an alternative, Huawei-free vision for the massive, complicated and high-stakes global 5G buildout.

Trump administration officials are still “trying to understand the full range of options,” John Costello, director of strategy, policy, and plans at the Cybersecurity and Infrastructure Security Agency, said at the CSIS event.

In any case, the message to Europe about 5G, according to the second industry source, has been, "Go slow. There’s no need to rush into this. We need to figure out how to do this now."

Right now, U.S. telecom companies have “no clear guidance on how to proceed” with a 5G buildout that excludes Huawei, which controls 28% of the global telecom equipment market. So, if Trump signs the telecom directive before MWC, the U.S. will be able to attend the conference armed with fresh evidence of its commitment to the issue. Or, in the case of Germany, lack thereof.

The administration’s desire to make a strong impression at MWC is so great that Secretary of State Mike Pompeo had planned to attend the event, according to a Politico source.

This person said that former House Speaker Newt Gingrich, one of Trump’s closest outside advisers, “called Pompeo and said, ‘What the hell are we doing on 5G?’” (Gingrich did not respond to a request for comment, and State declined to discuss its delegation.)

For now, besides boycotting China's 5G products, nobody really knows.

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