This past August, President Trump attempted to prohibit government use of devices from Huawei and fellow Chinese telecommunications company ZTE. Australia quickly followed in the United States’ footsteps and banned both companies from supplying 5G technology. The United States is now particularly concerned that these devices could be used against American military bases abroad. They have petitioned countries such as Germany, Italy and Japan to reject Huawei and ZTE. The United States may even provide aid and telecommunication development to countries that ban devices from these companies.
Huawei also has incredible influence over a number of companies worldwide. Companies such as Telecom Italia SpA and Japan’s NTT Docomo Inc. direct more than five percent of their expenditures to Huawei. Other companies like California-based NeoPhotonics Corp. derive nearly 50% of their revenue from them.
Huawei and ZTE have been considered a national security threat throughout 2018. In April, the Department of Commerce banned American companies from providing exports to ZTE for seven years. The Trump administration reduced the sanctions placed on ZTE in late May by allowing the them to do business with American companies if they followed certain rules. Many members of Congress believed that ZTE was still a threat to national security and voted in mid-June to reinstate the sanctions. During the same month, Congress discouraged Google from doing business with Huawei. They believed that Google’s parent company Alphabet was sharing data with Chinese businesses.
The United States petition comes ahead of the G20 Summit, an international forum for heads of state, finance and foreign ministers, and banks and business. The summit takes place in Argentina next week and will include negotiations between President Trump and Chinese leader Xi Jinping. The two leaders are expected to discuss the ongoing trade war. President Trump has promised to fix China’s “long-time abuse of the broken international system and unfair practices.”