US President Donald Trump will consider issuing executive orders to declare a national emergency that would prevent US companies from using telecommunications equipment produced by Chinese companies Huawei and ZTE.
According to Reuters, sources familiar with the situation said that executive orders, which had been considered for more than eight months, could be approved in January. In this case, the Ministry of Commerce will be forced to prevent American technology companies from buying equipment from foreign telecommunications manufacturers at risk for US national security.
The United States believes that Chinese companies Huawei and ZTE work under the interests of the Asian government and that the equipment produced by them can be used to spy on US citizens. Both companies have denied this accusation repeatedly.
The US president's approval of a decision banning the use of Huawei's telecommunications equipment by US companies "will be a serious blow in the war against China," said Daniel Ives, economist at a financial services company. and Wedbush Securities investment.
The expert highlights that the equipment produced by ZTE and Huawei is much cheaper, especially for rural operators in the Midwest.
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"If we consider rural operators using switches manufactured by Huawei or ZTE, the transition to new equipment might imply additional costs for some operators, costs exceeding $ 1 billion, so if this decree really applies, it could be a serious problem for operators and, perhaps, consumers, "Ives told Sputnik.
Economists judge that, although US national security is a priority and that the idea behind the expected action is not bad, it is still uncertain how the decision will be implemented.
"All of this looks good on paper, this is important from the point of view of national security, but it is not clear how it will be implemented in terms of additional costs for operators." The main question is how this will be implemented and whether the Government will subsidize the transition to new equipment, "he said.
Ives considers that this problem must be handled very carefully, because it can affect rural operators and, ultimately, the course of negotiations between China and the United States.
"China's symmetrical reaction to Apple remains a major risk for many steps of US technology, which should cause concern, even the reaction itself, but the domino effect it causes and how it can affect companies like Apple.", Ponderó Ives.
"For China and the United States, it is very important to understand the consequences and consider the fact that companies and countries are very interrelated from a technological standpoint," concluded Ives.
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