The President of the United States has just signed the Defense Authorization Act into law that prohibits any US official to use a device by ZTE or Huawei. The ban includes any devices that handle user data, which is basically every product of the two Chinese manufacturers. The document also states that employees, companies, agencies, and contractors must get rid of their current devices and replace them.
The bill covers anything that is a “substantial or essential component of any system,” as well as tech that is used to route or view user data. So even though it doesn’t mandate an outright ban on Huawei and ZTE products, it still means many government workers or contractors, or companies that want to do business with the government, will have to jettison much of their current technology. The Defense Authorization Act also directs U.S. agencies to allocate funding to companies that need to replace equipment as a result of the new bill.
In a statement to The Verge, Huawei called the ban a “random addition” that was “ineffective, misguided, and unconstitutional.” They did not say whether they will challenge the law or not, however. They did say it will increase costs for both consumers and businesses alike. Huawei and ZTE have both been targets of the US for years, with the former even being suspected of breaking the same trade bans as the latter. US lawmakers even pushed for AT&T to drop their deal to launch a 5G network in the US together. The Huawei Mate 10 Pro was meant to arrive with AT&T even before that, but was nixed last minute thanks to “political pressure.” It’s been a rough and bumpy road for both of these companies
The bill covers anything that is a “substantial or essential component of any system,” as well as tech that is used to route or view user data. So even though it doesn’t mandate an outright ban on Huawei and ZTE products, it still means many government workers or contractors, or companies that want to do business with the government, will have to jettison much of their current technology. The Defense Authorization Act also directs U.S. agencies to allocate funding to companies that need to replace equipment as a result of the new bill.
The ban does not single out Huawei and ZTE though. The list includes the prohibition of using video surveillance and telecommunications hardware by Hytera Communications, Hangzhou Hikvision Digital Technology Company, and Dahua Technology Company, all of them based in China.
This is more likely to hurt ZTE than Huawei, though. Huawei is the second largest phone manufacturer in the world, and US government employees are simply a drop in the ocean compared to the larger global market. ZTE being the smaller player has much more to lose, but regardless, still finds itself in a better position than it was earlier this year
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