Amid a deepening trade war with China, President Trump on Wednesday declared a “national emergency” to protect U.S. communications networks in a move that gives the federal government broad powers to bar American companies from doing business with certain foreign suppliers — including the Chinese firm Huawei.
Trump declared the emergency in the form of an executive order that says foreign adversaries are exploiting vulnerabilities in U.S. telecommunications technology and services. It points to economic and industrial espionage as areas of particular concern.
“The President has made it clear that this Administration will do what it takes to keep America safe and prosperous, and to protect America from foreign adversaries who are actively and increasingly creating and exploiting vulnerabilities in information and communications technology infrastructure and services in the United States,” White House press secretary Sarah Sanders said in a statement.
The order authorizes the commerce secretary to block transactions involving communications technologies built by companies controlled by a foreign adversary that put U.S. security at “unacceptable” risk — or pose a threat of espionage or sabotage to networks that underpin the day-to-day running of vital public services.
Wednesday’s announcement was expected nearly a year ago and comes as neither Washington nor Beijing appears willing to back down in their ongoing economic dispute. The National Economic Council, which had blocked the move for months, dropped its objection as trade talks hit an impasse, one official said.
Trump’s executive order does not immediately exclude any specific companies or countries but certainly will not lessen tensions with Beijing. It is consistent with an increasingly aggressive tack against China in which Trump has used tariffs as economic weapons, a tactic that he believes to be popular with his political base.
The move also boosts the administration’s somewhat uphill effort to persuade allies and partners in Europe to bar Huawei, which officials say is beholden to the Chinese government, from their next-generation 5G wireless networks.
The order is not restricted to any one technology, such as 5G, but instead covers a swath of information communications technologies. That could invite a legal challenge from companies who believe it is overly broad, officials and analysts say.
Trump declared the emergency under the International Emergency Economic Powers Act, a 1977 law used by every president since Jimmy Carter to impose sanctions on countries such as Iran and Russia. It gives the president broad authority over economic activity.
Trump’s executive order instructs the commerce secretary to develop an enforcement regime within 150 days and permits him to name companies or technologies that could be barred.
Should that happen, said Paul Rosenzweig, a former homeland security official in the George W. Bush administration, the banned firm “would assuredly sue.” Rosenzweig, now a senior fellow with the R Street Institute, a policy group that advocates free markets, said congressional action to bar a specific company probably would have a better chance at withstanding legal scrutiny.
The order says that, although an open investment climate is generally positive, the United States needs to do more to protect the security of its networks. The idea is to have an “in case of emergency, break glass” authority, said one U.S. official who, like others interviewed, spoke on the condition of anonymity to discuss the order before its official release Wednesday afternoon.
And though the president already can veto proposed acquisitions of American companies by foreign buyers if he believes they endanger national security, the government lacks the authority to intervene in specific transactions deemed to pose such a risk.
“There are other levers we have, based more on contracting influence and power of the purse, but this would be more of an explicit exclusionary authority,” said an official familiar with the matter.
Last year Trump signed a law that barred the federal government and its contractors from doing business with Huawei and several other Chinese companies, on national security grounds. And the country’s four major telecom carriers have committed to the federal government that they will not use Huawei equipment in their networks.
But this new order, once implemented, would establish a national policy applying to commercial entities outside the U.S. government and permits the commerce secretary to name the countries and organizations subject to the restrictions, as well as the technologies at issue. The order also would permit the secretary to direct the timing and manner of how U.S. companies would cease using such equipment, officials said.
A number of rural carriers use Huawei in their networks as a lower-cost alternative to European companies such as Nokia and Ericsson. The Federal Communications Commission is preparing a rule that is likely to restrict federal subsidies for carriers that use Huawei gear, and the rural carriers have told the government that replacing Huawei is a cost they cannot afford.
A number of European officials in recent months have expressed consternation that the United States is pressing them to block Huawei from their planned 5G networks while not having officially banned the company. This order helps counter that objection, officials said.
Security officials say the issue is one of national security, not trade. But the two inevitably have become linked as China’s quest to dominate advanced technologies in the global market has prompted significant concerns about the potential for espionage or sabotage.
Trump, unlike most previous presidents, has frequently relied on national security arguments in his bid to reshape U.S. trading relationships, demonstrating a willingness to stretch legal authorities beyond their customary bounds.
Last year, for instance, he cited a little-used national security provision of a 1962 law to impose tariffs on imported steel and aluminum. He also has ordered the Commerce Department to investigate doing the same on foreign-made automobiles and auto parts.
The national emergency declaration comes a day after a congressional hearing in which senators from both parties joined administration officials in calling out the risks of doing business with a company such as Huawei. They emphasized that the problem was less about the company than the authoritarian country whose system of laws, which lacks due process and transparency, it must obey.
“It’s not about overseeing Huawei. It’s about overseeing China,” Sen. Lindsey O. Graham (R-S.C.), chairman of the Senate Judiciary Committee, said during the hearing on 5G security.
“This is a single-party government,” said Christopher Krebs, director of the Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency. “Everything that flows from the central party is a manifestation of their philosophy.’