3rd Party Risk Management , Critical Infrastructure Security , Cyberwarfare / Nation-State Attacks
Huawei Ban: White House Budget Chief Seeks DelayBanning Chinese Manufacturer Means 'Dramatic Reduction' in Government Suppliers
The White House budget chief is seeking to delay a ban on the U.S. government using products manufactured by Huawei.
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The request to delay the implementation of parts of the National Defense Authorization Act was made by Russell T. Vought, the acting director of the Office of Management and Budget, in a June 4 letter he sent to Vice President Mike Pence, House Speaker Nancy Pelosi and eight other members of Congress, The Wall Street Journal first reported on Sunday.
In the letter, which has been seen by Information Security Media Group, Vought warns against implementing the ban too quickly, saying it will result in a “dramatic reduction” in suppliers, both to the federal government as well as rural telecommunication firms, which rely heavily on both federal grants as well as Huawei gear.
Huawei, meanwhile, is “aware of the discussions and is carefully watching the situation,” a spokesman says in a statement. "We remain committed to supporting our existing U.S. customers.”
White House Continues Anti-Huawei Press
Shenzhen-based Huawei is the world's largest telecommunications equipment maker and second largest manufacturer of smartphones.
The White House has continued to mobilize against Huawei, as well as Chinese telecommunications manufacturing giant ZTE, on the grounds that they pose a risk to national security (see Huawei's Role in 5G Networks: A Matter of Trust).
In August 2018, President Donald Trump signed the NDAA into law in, warning that Chinese firms could be coopted into furthering Beijing's espionage efforts.
The NDAA bans federal agencies and recipients of federal grants from using Huawei equipment or working with contractors that make substantial use of its technology, as well as hardware built by Chinese manufacturing giant ZTE.
Last month, Trump signed an executive order that declared a national emergency, giving the government the power to ban any equipment that "poses an undue risk of sabotage to or subversion of the design." At the same time, the U.S. Commerce Department added Huawei and 68 of its non-U.S. affiliates to the so-called "entity list," which is a blacklist that prohibits organizations from procuring U.S. goods or services without first obtaining an export license from the government.
The ban led Google parent Alphabet to immediately cease to provide services and technology to Huawei, leaving owners of Huawei-built smartphones that run Android unable to obtain operating system updates or security fixes. Numerous chipmakers also announced an immediate ban on supplying Huawei (see Google Restricts Huawei's Access to Android).
In response, the Trump administration announced that it would delay the ban until Aug. 19, to give partners and customers time to put alternate arrangements in place (see Huawei Gets 90-Day Reprieve on Ban).
Huawei, meanwhile, has gone to court to fight the NDAA, challenging the law's constitutionality (see Huawei Takes New Legal Step to Fight US Ban).
Small Carriers Contest Huawei Ban
The move to ban Huawei has been fiercely contested by some parts of the U.S. telecommunications sector, including smaller carriers, for which Huawei's lower price point - compared to its competitors - has long been attractive. Last year, Caressa Bennet, general counsel for the Rural Wireless Association, which represents U.S. carriers that have fewer than 100,000 subscribers, told Reuters that banning Huawei would collectively cost its members up to $1 billion.
The RWA last December also warned the Federal Communications Commission that banning Huawei and ZTE "would irreparably damage existing rural wireless broadband networks, inhibit future wireless broadband deployment in many rural and remote areas throughout the country, and fundamentally fail to effectively protect national security."
The RWA argued that if the ban did go ahead, then the government "should provide transitional funding and an extended compliance period for affected small businesses."
Vought's letter appears to be trying to buy time for the RWA, amongst others.
“While the administration recognizes the importance of these prohibitions to national security,” his letter states, “a number of agencies have heard significant concerns from a wide range of potentially impacted stakeholders who would be affected.”
In particular, "rural federal grants recipients may be disproportionately impacted by the prohibition," Vought's letter reads.
The OMB says it isn't seeking a change in U.S. policy. “There is not a change to administration policy with regard to Huawei and would not delay the ban taking effect this year on the federal government doing business with them," Jacob Wood, an OMB spokesman, tells ISMG. "It also would not stop or delay the restrictions [the Department of] Commerce announced on the sale of U.S. technology to Huawei.
"This is about ensuring that companies who do business with the U.S. government or receive federal grants and loans have time to extricate themselves from doing business with Huawei and other Chinese tech companies listed in the NDAA.”