It is no secret that Chinese companies such as Huawei and ZTE have been on the US government’s radar for quite some time. In the past couple of years, Huawei has essentially been banned from doing business with US companies and vice versa, effectively locking them out of the US smartphone market.
But it gets worse. A report from Reuters has revealed that US President Joe Biden has signed into law a new legislation that effectively prevents Huawei and ZTE (and some other companies) from obtaining licenses from the FCC.
For those unfamiliar, companies that want to sell certain products in the US like smartphones, tablets, speakers, and so on will have to obtain a license from the FCC to do so. This is why in the past FCC filings have been a good way of seeing upcoming products from companies ahead of their announcements.
With this new legislation, the FCC will no longer bother to review or approve authorization for application for equipment that is said to pose an “unacceptable risk to national security”. Prior to this, Huawei and ZTE were deemed as national security threats but could still apply for licenses as long as no federal funds were involved. According to FCC Commissioner Brendan Carr:
“We have already determined that this gear poses an unacceptable risk to our national security, so closing what I have called the ‘Huawei loophole’ is an appropriate action for us to take.”
Neither Huawei nor ZTE have commented on the new legislation yet, but like we said, this new law effectively stops the companies from being able to launch new products in the US.