Trump’s hand is hovering over China executive order

President Trump is reportedly on the verge of signing an executive order effectively banning Huawei, and other Chinese companies, from providing any products or services in the US market.

According to Reuters, the signing of the order could happen as soon as this afternoon (Wednesday 15 May) although no companies will be named specifically. It is believed US companies will be banned from purchasing any telco equipment from vendors who are deemed a threat to national security.

The vagueness of the report is perhaps down to the fact the news is not official just yet, although it might well be designed that way in the document. Intelligence agencies will presumably be requesting as much freedom from bureaucratic shackles as possible; vague language in the executive order might be by design.

The White House will allegedly use the power of the International Emergency Economic Powers Act, which offers the President the luxury of regulating commerce in response to national security concerns.

The executive order certainly comes at a sensitive time, with both the US and China on edge as trade talks have stagnated. The toing and froing over trade tariffs look set to escalate once again, with the reprieve from the threat of global trade war looking to be over.

President Trump has been suggesting talks are still on a steady path through Twitter, but many commentators believe the two superpowers are at odds with each other. Following the Chinese decision to impose tariffs on $60 billion worth of US goods starting in June, the White House is supposedly preparing a new list of $300 billion worth of Chinese imports that would be hit with tariffs of up to 25%.

The executive order, should the rumours prove to be true, could be fatal blow to the trade talks. Huawei is the telco champion of China, the poster boy of Chinese dominance in the technology world. Although Huawei will not necessarily be losing any significant business as a result of the order, it is a symbolic gesture.

While this executive order should come as little surprise, the world should ready itself for further escalation of a trade war between the two economic superpowers. Collateral damage could certainly be notable, especially in Europe where governments have been resisting US pressure to act against Huawei specifically.