The new executive order is another case where the Biden administration is building on a Trump-era China initiative. Mr Biden has also kept tariffs on Chinese goods as leverage in the negotiations. In this case, Biden administration officials say they acted in part to correct the executive order issued by President Donald J. Trump last November, which was successfully challenged in American courts for failing to provide the real basis for banning investments clearly set out in Chinese companies associated with the defense industry.
The list of Chinese companies affected by the new order was not compiled by the Pentagon, but by the Treasury Department, which has many years of experience in imposing sanctions. This is in part an attempt to clarify the rationale behind each company’s designation, officials say, in hopes the bans will stand up in court.
Government officials say the number of Chinese companies affected by the ban is likely to increase.
The contract is for several giants in the Chinese telecommunications industry, some of which are still in the United States or work with American companies. It is a signal that control of Chinese influence over the global tech space has not diminished in Washington despite the move to democratic control in the White House.
Among the companies Mr. Biden listed on Thursday included Huawei, China’s national master in telecommunications and at the heart of its efforts to export 5G networks around the world. For years, the Trump administration tried to marginalize the company by banning the sale of most of its technology in the US, asking allies to reject them, and starving the company out of the chips they needed. For a while, former Secretary of State Mike Pompeo and other American officials threatened to exclude allies from participating in American intelligence briefings if they used Huawei in their networks. That backfired, but the allies increasingly restricted Huawei’s role. Huawei is not publicly owned, however, so the order would essentially prohibit Americans from participating in the subscription of their bond offerings.
Huawei did not comment on the ban on Thursday.
The order also listed three wireless carriers – China Unicom, China Telecom, and China Mobile – that were increasingly in the crosshairs of American lawmakers and regulators. In 2019, lawmakers asked the Federal Communications Commission to review China Unicom and China Telecom’s licenses to operate in the United States. The Agency moved in March consider restricting China Unicom operations. All were scrutinized to determine whether they were redirecting telephone or Internet traffic back to China for the benefit of Chinese intelligence services.
China Telecom did not want to comment on the new order.
In 2019, the Federal Communications Commission also has a commission the application of China Mobile blocked to assist calls between the United States and other countries, citing the risk that the Chinese government could use its control over the company to spy on Americans’ calls.
But the problem is compounded by the company’s links with American corporations. China Mobile has been supporting iPhones in China since 2014, a deal that was critical to Apple’s growth in the Chinese market. “Apple has tremendous respect for China Mobile and we look forward to working with them,” said Tim Cook, Apple’s CEO, in a press release. At that time, China Mobile was the largest cellular network in the world with 763 million customers.