Proposal could bar the likes of Nokia and Ericsson from selling next-generation 5G equipment to US telcos if it is designed or manufactured in China
The US presidential administration is reportedly considering barring telecoms equipment manufacturers from selling next-generation 5G gear in the US if it has been designed or manufactured in China, in what would be a broadening of the trade tensions between the two countries.
The proposals are part of a 150-day review of the US telecommunications supply chain that began with an executive order issued last month, and is to conclude in October, the Wall Street Journal reported.
The order restricted some foreign-made networking gear and services from being used in the US due to security concerns.
Under the review the US administration is in talks with manufacturers to see whether they can develop and build equipment bound for the US without the involvement of China, the paper reported, citing unnamed sources.
Supply chain ban
The talks are in early stages, with a list of proposed rules and regulations due by the 150-day deadline.
This means that once proposed, any new rules could take months or years to adopt, the paper said.
The proposals could reshape the global telecoms supply chain, and would have the greatest impact on Finland’s Nokia and Sweden’s Ericsson, the two largest telecoms equipment makers after China’s Huawei.
The US is the largest single buyer in the global telecoms equipment market, which is worth $250 billion (£197bn) a year.
The rules would cover electronics for cellular towers as well as networking gear such as routers and switches.
The White House declined to comment specifically on the proposals, but said it was “critical” that next-generation telecoms networks be “trusted”.
One of the Journal’s sources said the US had begun talks with Asian countries in 2018 or earlier over shifting manufacturing processes that currently take place in China into their territories.
The Journal’s sources said the US may allow some basic electronic components, such as power converters or cases, to be made in China.
The US may also seek to ban essential telecoms software that’s developed in China, while allowing publicly available, generic open source code that is developed there.
In May the Chinese government introduced draft security regulations that industry watchers said could be used to bar US technology.