President Donald Trump today signed the new National Defense Authorization Act (NDAA) for 2019, which includes a ban against government agencies using devices or electronic components sold primarily by Chinese firms Huawei and ZTE.
NDAA 2019 Bans Government Use Of Huawei, ZTE
The 2019 NDAA bill bans U.S. federal agencies from using anything from Huawei or ZTE that is a “substantial or essential component of any system,” as well as any technology that is used to route or view user data.
The ban doesn’t cover just Huawei and ZTE, but other Chinese telecommunications hardware makers, such as Hytera Communications, Hangzhou Hikvision Digital Technology Company and Dahua Technology Company. Because the ban on Huawei and ZTE components could prove to be a major disruption to some agencies that relied on the cheaper Chinese technology, the bill also allocates funds for the agencies and companies that need bigger budgets in order to replace all the necessary components.
The Senate Wanted More
Recently, ZTE suffered a crisis in the U.S. when the Department of Commerce issued a ban against U.S. companies purchasing devices or components from the state-owned Chinese company. The Department of Commerce issued the ban primarily because ZTE was ignoring the sanctions against Iran and other countries.
This ban, which many thought could have killed the company, was quickly reverted once President Trump intervened. However, ZTE still had to pay $1 billion in fines for its past transgressions, as well as put $400 million into an escrow account in case it repeats the same violations in the near future.
However, both the U.S. House and Senate didn’t think the fine was enough, so they re-included their own versions of the ban in amendments to the 2019 NDAA. The Senate wanted a complete ban on all Huawei and ZTE devices sold into the country, while the House wanted to ban only federal agencies from using the Chinese devices. The Senate dropped its version of the bill and went with the House version instead.
U.S. federal agencies will have to replace all devices and components from Huawei, ZTE and the other Chinese companies mentioned in the bill over the next two years until the ban fully goes into effect.