A week ago, the US Department of Defence pulled a trigger on ZTE and Huawei products. The department halted the sale of all smartphones, routers, modems and any gadget containing components manufactured by Huawei or ZTE to any of the various Pentagon military bases.
Major Dave Eastbur n, Pentagon’s spokesperson, told Reuters that Huawei and ZTE devices may pose unacceptable risk to the department’s personnel and missions.
In technology terms, what does this mean? Several things. Firstly, Pentagon has probably credible intelligence information from the National Security Agency (NSA) that Huawei and ZTE may be agents of terrorists or governments.
Secondly, Huawei and ZTE telecommunication equipment has built-in surveillance function that can be used to steal important US security details.
The basis for this may be the earlier story of last month where ZTE was found on the wrong side of US exports law. ZTE secretly built and exported US telecommunication technology to North Korea and Iran. This violated the US trade embargo against the two countries.
The US government, among other things, ordered ZTE to fire four senior executives and discipline 35 employees who were directly involved in the malpractice. ZTE expelled the four employees but refused to penalise the other 35 employees. US hit back and ordered a blanket ban on all US telecommunication companies, stopping them from doing business with ZTE.
Meanwhile, the US government has announced that Huawei is also being investigated because it is believed that it also exported equipment it had manufactured from its US facilities clandestinely to Iran in violation of US sanctions.
What is very clear in these cases is that both companies violated US trade laws by exporting to countries that are no go zones for US products. However, what is not clear is how such trade offences have suddenly morphed into national security issues. The Pentagon has not proven beyond any reasonable doubt that ZTE or Huawei products posed a security threat at any particular point in time.
Perhaps the assumption is that if both ZTE and Huawei can connive with counties like Iran and North Korea to bypass an embargo, what can stop these companies from stealing US telecommunication secrets and passing the same to a country like Russia, for example? After all, both North Korea and Iran are known to be pilling up nuclear artillery.
This could also be a trade ploy to kill companies like ZTE and Huawei. By ordering component manufactures not to supply to ZTE, the company cannot manufacture even a smartphone from US anymore; most of its components were being supplied by US companies like Qualcomm.
The irony in this is that iPhone, the benchmark US smartphone, is assembled in China by Foxconn. The Chinese government has supported the assembly of iPhone in China by going all the way to build an entire airport at the facility in order to facilitate iPhone exports from China to USA.
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