Trump declares national emergency over tech threats to US

In the latest escalation in tensions between the US and China, Donald Trump has signed an executive order declaring a national emergency over perceived threats to the country's IT and computer networks from “foreign adversaries”.

While no specific company is named in the order, the main target is thought to be Huawei, the Chinese smartphone and telecoms giant that has recently become embroiled in a number of controversies.

The order

The White House released a statement on May 15th confirming Mr Trump had signed an executive order named ‘Securing the Information and Communications Technology and Services Supply Chain'.

It said: “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.”

As well as declaring a national emergency, the order gave authority to the commerce secretary, Wilbur Ross, to block transactions that are deemed to pose “an unacceptable risk to the national security of the United States or the security and safety of United States persons”.

This has been interpreted as a targeted attempt to hinder Huawei's attempts to do business in the US and to stop the Chinese firm from trading with American companies.

Huawei operates telecoms networks that reach approximately one third of the world's population. Its vast presence around the world means the company doesn't rely on America for its revenue, but it does depend on key components imported from the US. Consequently, the effective ban on American companies engaging in transactions that involve information or technology viewed as a threat to national security could create significant operational problems for Huawei.

Huawei's position

A lot of the controversy currently surrounding Huawei stems from the concerns raised by the US and other countries that the firm's telecoms networks and equipment could be used for surveillance by the Chinese government.

The US has already taken measures such as restricting federal agencies from using Huawei products and has encouraged its allies to take similar action. Australia and New Zealand have both blocked the use of Huawei equipment in their next-generation 5G mobile networks.

For its part, the Shenzhen-based company has always denied allegations that its technology infrastructure is being used as a surveillance tool by the Chinese government.

Responding to the Trump administration's latest move, Huawei said placing restrictions on the company's ability to do business in the US will not make the country more secure or stronger.

“Instead, this will only serve to limit the US to inferior yet more expensive alternatives, leaving the US lagging behind in 5G deployment, and eventually harming the interests of US companies and consumers,” the organisation said in a statement.

Escalating tensions

These developments suggest the simmering tension between the US and China is unlikely to dissipate anytime soon.

The countries are currently locked in a prolonged trade war, which came to a head last week with the US government's decision to implement a more-than twofold increase in tariffs on $200 billion (£155.9 billion) worth of goods imported from China.

This prompted a retaliation from the Asian nation, which said it will increase tariffs on $60 billion of US imports from June 1st.

These increased barriers to healthy trade between the US and China – the world's biggest economies – had a clear early impact on stock markets. Asian markets witnessed a fall on Tuesday May 14th, after Wall Street closed with sharp losses of its own.

However, these downturns were followed by signs of stabilisation, after tentative indications that the US and China were prepared to resume talks in an effort to find a mutually acceptable solution to the trade dispute.

Mr Trump said he expected to meet China's president Xi Jinping at next month's G20 summit in Japan, and tweeted that his relationship with his Chinese counterpart “remains a very strong one”.

Early trading on Wednesday May 15th showed an upturn on Asian markets, following modest gains on Wall Street, while European indexes such as London's FTSE 100 and Germany's Dax also showed signs of recovery.

This post first appeared here

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