US President Donald Trump attends the 38th Annual National Peace Officers Memorial Service on May 15, 2019, in Washington, DC. Picture: BRENDAN SMIALOWSKI / AFP
US President Donald Trump attends the 38th Annual National Peace Officers Memorial Service on May 15, 2019, in Washington, DC. Picture: BRENDAN SMIALOWSKI / AFP

Washington/Beijing — President Donald Trump is expected to sign an executive order this week barring US companies from using telecommunications equipment made by firms posing a national security risk, paving the way for a ban on doing business with China’s Huawei, three US officials familiar with the plan said. 

The order, which will not name specific countries or companies, has been under consideration for more than a year but has repeatedly been delayed, the sources said, asking not to be named because the preparations remain confidential. It could be delayed again, they said.

The executive order would invoke the International Emergency Economic Powers Act, which gives the president the authority to regulate commerce in response to a national emergency that threatens the US. The order will direct the commerce department, working with other government agencies, to draw up a plan for enforcement, the sources said.

If signed, the executive order would come at a delicate time in relations between China and the US as the world’s two largest economies ratchet up tariffs in a battle over what US officials call China’s unfair trade practices.

Washington believes equipment made by Huawei Technologies, the world’s third largest smartphone maker, could be used by the Chinese state to spy. Huawei has repeatedly denied the allegations.

Chinese foreign ministry spokesperson Geng Shuang said during a daily briefing in Beijing on Wednesday that the US had been “abusing its national power” to “deliberately smear” and suppress certain Chinese companies.

“This is not honourable, nor is it just,” he said. “We urge the US to stop using the excuse of security issues to unreasonably suppress Chinese companies, and provide a fair, just, non-discriminatory environment for Chinese companies carrying out normal investments and operations in the US.”

The US has been actively pushing other countries not to use Huawei’s equipment in next-generation 5G networks that it calls “untrustworthy”. In August, Trump signed a bill that barred the US government itself from using equipment from Huawei and another Chinese provider, ZTE.

In January, US prosecutors charged two Huawei units in Washington state, saying they conspired to steal T-Mobile US trade secrets, and also charged Huawei and its CFO with bank and wire fraud on allegations that the company violated sanctions against Iran.

The federal communications commission in April 2018 voted to advance a proposal to bar the use of funds from a $9bn government fund to buy equipment or services from companies that pose a security threat to US communications networks.

Federal communications commission chair Ajit Pai said last week he was waiting for the commerce department to express views on how to “define the list of companies” that would be prohibited under the commission’s proposal.

The commission voted unanimously to deny China Mobile’s bid to provide US telecommunications services last week and said it was reviewing similar prior approvals held by China Unicom and China Telecom.

The issue has taken on new urgency as US wireless carriers look for partners as they rollout 5G networks.

While the big wireless companies have already cut ties with Huawei, small rural carriers continue to rely on Huawei and ZTE switches and other equipment because they tend to be cheaper.

The Rural Wireless Association, which represents carriers with fewer than 100,000 subscribers, estimated that 25% of its members had Huawei or ZTE equipment in their networks, it said in a federal communications commission filing in December.

At a hearing Tuesday, US senators raised the alarm about allies using Chinese equipment in 5G networks.