Trump might be about to escalate his trade fight with China

Sean Gallup/Getty Images

  • The Trump administration may crack down on sales of some Chinese-made telecom equipment into the US, according to a new report.
  • The limits would be based on national security concerns that the Chinese government could force firms to turn over user data.
  • It would represent an escalation of the recent trade tensions between the US and China.

The Trump administration may limit some Chinese cell phone producers’ ability to sell devices in the US, according to a new report, in a move that would raise trade tensions with China.

According to the Wall Street Journal’s John McKinnon, the Trump administration is mulling an executive order that would halt the sale of Chinese telecom devices into the US on national security grounds.

The Department of Defence has ordered that Chinese-made cell phones not be sold at retail locations on military bases for fear that the Chinese government could hack the devices.

The escalation would be a blow to Huawei and ZTE, two of China’s largest telecom companies. The two companies have made assurances that the government would never use their devices for intelligence gathering.

According to the Journal, President Donald Trump may limit the sales via executive order in the next week. No final decisions have been made. One option, the report said, is to order companies with US government contracts to limit the use of Chinese-made parts in their devices.

The move would be another blow in the escalating trade conflict between the US and China. A significant amount of focus in the trade fight has been on emerging technologies, like new fifth-generation cellular networks.

Trump’s tariff on Chinese goods focused on tech products. Reports over the past month indicate that the administration is looking at other ways to crack down on Chinese investments into US tech companies. The Justice Department has also gone after ZTE for alleged violations of Iranian and North Korean sanctions.

China’s government has promised to retaliate in kind if these types of actions continue from the Trump administration.

While tech has been a particular focus, the two countries are also engaged in a broader back and forth over trade restrictions.

Four top trade officials from the US – Treasury Secretary Steven Mnuchin, Commerce Secretary Wilbur Ross, US Trade Representative Robert Lighthizer, and White House National Trade Council Director Peter Navarro – will be in China for meetings with top Chinese officials on Thursday.

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