US president Donald Trump has signed a bill banning US government agencies and contractors from using most components supplied by Chinese vendors including Huawei and ZTE.
The new Defense Authorization Act includes a provision that will largely prohibit US government agencies and any company wishing to contract with the government from using Chinese components or services, the Vergereported.
The ban, which is to be implemented over a two-year period, covers the supply of any components or services that are essential or critical to the systems they are deployed in. Huawei and ZTE may still be able to provide some components as long as they cannot be used to route or view data.
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In addition, the Act makes arrangements for funding to be provided to contractors that will need to change technologies as a result of the ban.
Huawei has objected to the addition of the ban into the defense Act, calling it “ineffective, misguided, and unconstitutional,” but stopped short of immediately indicating that it will challenge the ban in court.
The Act is considered to be a compromise to satisfy lawmakers who had been calling for the reinstatement of the import ban on ZTE, despite the ban having been overturned last month after intervention from Trump himself.
As well as escalating the US-China trade war, the US government's decision is expected to add to the pressure on the Australian government to ban or restrict Huawei's participation in supplying equipment for the nation's 5G rollouts.