U.S. May Ban All 5G Equipment Made In China

(Image credit: Michael Vi/Shutterstock)

According to a Wall Street Journal report this week, the U.S. government is considering banning all 5G equipment made in China from being sold or even used in the U.S. The move could impact Chinese 5G modem makers, as well as Nokia and Ericsson, two European companies with manufacturing facilities in China.

In May, U.S. President Donald Trump issued an executive order banning technologies that “pose an unacceptable risk to the national security of the United States.” The order essentially targeted Huawei and other Chinese companies that could potentially enable Chinese government espionage against the U.S. through hardware or software backdoors

Huawei is already banned from selling telecom equipment in the U.S., so the latest move won’t directly impact Huawei. The new potential move from the U.S. government to ban companies that sell products manufactured in China seems to be more about the espionage and backdoor risk than it is about trade. However, getting European companies to stop making products in China would likely also put a dent in China’s economy.

After Huawei, Nokia and Ericsson are the largest telecom equipment vendors. WSJ reported Nokia and Ericsson have already started switching production outside of China, primarily due to the recent increase in U.S. tariffs against China-made products. According to Citi analysts Amit Harchandani and Robert Lamb, Ericsson’s Chinese manufacturing facilities account for 45% of its total manufacturing capacity, and 10% of Nokia’s manufacturing capacity is in China.

This means Ericsson should have a harder time switching its production outside of China than Nokia, which could lead to increased U.S. business for Nokia. However, both companies should ultimately profit from all the recent restrictions put against Huawei, including Huawei’s inability to license new Arm IP.

A Trump administration official told WSJ:

“The fourth industrial revolution will be built on the telecommunications networks being constructed today. It is critical that those networks be trusted.”

The WSJ report also said that the U.S. government has been in talks to other Asian countries about shifting U.S. businesses' production there.

Lucian Armasu
Lucian Armasu is a Contributing Writer for Tom's Hardware US. He covers software news and the issues surrounding privacy and security.
  • Dark Lord of Tech
    5G will also cause many heath issues.
  • jsmithepa
    Probably a good thing. Any business should not rely on a single vendor, have some wiggle room.