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Trump's Acting Budget Chief Seeks Two-year Delay For Huawei Restrictions

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The Trump administration's acting budget chief, Russell Vought, has sought a delay in imposing restrictions on products of the Chinese telecom-equipment major Huawei Technologies Co. Ltd.

In a letter to Vice President Mike Pence and nine members of Congress, Vought requested for a delay to ensure proper implementation of the ban and to gain additional time to seek alternative solutions for the potential impacts.

Citing national security concerns, The Pentagon's 2020 spending bill had placed a broad ban on federal money being used by federal agencies and contractors to purchase Huawei products. The bill was signed last year, for the ban to begin in two years. Vought is now asking for the ban to begin in four years instead.

The ban will make it difficult for Huawei and other Chinese technology companies such as ZTE to do business with American companies. Huawei and seventy affiliates have been placed on the U.S. "Entity List," which contains a list of companies that the U.S. believes are potentially a national threat.

The ban on Huawei is primarily aimed at keeping equipment made by the Chinese company out of the next generation of wireless network, 5G.

Huawei, the world's largest telecom-equipment maker, and ZTE are now major players in the 5G market as they manufacture and sell telecom equipment for 5G networks at competitive prices.

The ban on these companies is expected to cost the telecom industry billions of dollars due to higher-priced alternatives left in the market, with the implementation also taking many years. It will also create losers on both sides as technology companies depend on each other for crucial components required in their products.

Huawei's main rivals in providing 5G network solutions are Sweden's Ericsson (ERIC), Finland's Nokia Corp. (NOK) and South Korea's Samsung Electronics Co. (SMSN.L, SSNNF.OB, SSNLF.OB). These companies could benefit as they are capable of supplying full-scale 5G network solutions.

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