Trump has signed an executive order to ban foreign telecoms equipment

Trump has signed an executive order to ban foreign telecoms equipment

A broad USA crackdown, announced on Wednesday in an executive order, was the latest shot fired in an escalating trade war that is rattling financial markets and threatens to derail a slowing global economy. -China trade dispute just as Treasury Secretary Steven Mnuchin said he would visit China soon for more talks.

As part of a trade war with China, the United States government formally added Huawei to its Entity List, barring it from doing business with any company based in the United States.

In the Executive Order on Securing the Information and Communications Technology and Services Supply Chain Trump states that he reckons "foreign adversaries are increasingly creating and exploiting vulnerabilities in information and communications technology and services".

The United States will certainly consider issuing new regulations that aim to limit the amount of sensitive US technology that makes its way to China and helps Chinese companies - indeed, it's still rolling out new export control rules on emerging technologies - but Washington can not unravel the dense network of the global tech sector on its own.

The views of President Trump and lawmakers on both sides of the aisle aligned when they determined that allowing the Chinese company Huawei to build a global 5G network constitutes a security threat to the U.S.

Huawei, the biggest global maker of switching equipment for phone and internet companies, has spent a decade fighting accusations it facilitates Chinese spying.

Speaking at a U.S. Senate Appropriations subcommittee hearing, Mnuchin characterized two days of high-level talks with Chinese officials in Washington last week as constructive.

Tensions have further escalated between Beijing and Washington over the effective barring of Huawei from the USA market.

He did not say when his China trip might take place.

Huawei was the world's third largest purchaser of semiconductors past year, accounting for 4.4% of global market share, behind only Samsung Electronics Co Ltd and Apple Inc, according to Gartner, a research firm.

American suppliers also need Chinese customers.

Huawei said that it's "ready and willing to engage with the U.S. government and come up with effective measures to ensure product security".

Trade talks had looked close to collapsing in the past week after a dispute over Chinese changes to a draft text prompted the United States to hike tariffs on Chinese goods and Beijing to retaliate with higher duties on USA products.

The Trump administration had pledged up to $12 billion in aid to help offset losses resulting from Chinese tariffs.

"Restricting Huawei from doing business in the United States will not make the USA more secure or stronger", the company said in a statement.

But trading partners and close allies in Europe, North America and Asia are also in the US administration's sights.

The other big backdrop to this week's measures is the ever-escalating trade war.

Chief Financial Officer Brett Biggs told Reuters the company would seek to ease the pain, in part by trying to buy from different countries. But she told reporters later that ratification of the agreement would be hard as long as the tariffs remain in place.

Now the Chinese company is the undisputed leader in getting to market proven 5G hardware and software. Eurasia called the administration's decision a "potentially explosive act".

Officials said that "interim regulations" were expected before final rules were set, but were vague on what that meant.

USA lawmakers have long feared that the firm's equipment could be used to spy on Americans, and Democrats and Republicans lined up in support of the Trump administration's move.

Trump could launch 25% tariffs on another $300 billion worth of Chinese goods when he meets Xi next month.

Beijing is vowing not to succumb to USA pressure.

CNBC's Joe Kernen reported on two emails he received from a "well-known CEO" and a "really smart telecom investment banker", as the discussion on "Squawk Box" turned to the president's latest salvo in the U.S. Other data showed a drop in US industrial production. Consumer spending accounts for more than two-thirds of USA economic activity.

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