Trade wars – part 2. US government moves to block China Mobile from entering the US market
Growing tensions between the United States and China have been evidenced after President Trump’s administration moved to block the expansion of China Mobile.
China Mobile had applied back in 2011 permission to enter the US market, but this is being blocked over national security grounds.
The United States government under President Trump has adopted an increasingly protectionist stance, and has blocked other Chinese deals such as Broadcom’s hostile takeover attempt of US-based Qualcomm.
And now China Mobile has become the latest entity to be targetted by the US.
The National Telecommunications and Information Administration (NTIA) said in a statement, that the Federal Communications Commission (FCC) should deny the state-owned Chinese firm’s 2011 application to offer telecommunication services between the United States and other countries.
“After significant engagement with China Mobile, concerns about increased risks to US law enforcement and national security interests were unable to be resolved,” explained David J. Redl, Assistant Secretary for Communications and Information, at the US Department of Commerce.
“Therefore, the Executive Branch of the US government, through the National Telecommunications and Information Administration pursuant to its statutory responsibility to coordinate the presentation of views of the Executive Branch to the FCC, recommends that the FCC deny China Mobile’s Section 214 license request.”
It is worth noting that China Mobile is technically the largest telecom carrier in the world with 899 million subscribers.
And according to Reuters, China Mobile has not yet responded to the US move, but Chinese foreign ministry spokesman Lu Kang, in response to a question about China Mobile at a daily briefing, is quoted as saying: “We urge the relevant side in the United States to abandon Cold War thinking and zero sum games.”
China always encourages its companies to operate in accordance with market rules and to respect the laws of the countries it operates in, he said, adding the United States should stop putting “unreasonable pressure” on Chinese firms.
The move comes amid growing tensions between the US and China, after President Trump imposed tariffs on $34 billion worth of goods from China, as of 6 July.
Beijing is expected to respond with tariffs of its own.
But to some Trump’s strategy seems to be winning. He brought another Chinese firm, ZTE to its knees after it ignored US rules about trading with Iran and North Korea.
That forced ZTE in May to declare that “major operating activities of the company have ceased,” as a consequence of the seven year ban on US companies supplying with software and components.
ZTE is currently in the process of getting the ban lifted, but is facing stiff opposition from some lawmakers in Washington.
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