Rep. Mike ConawayKenneth (Mike) Michael ConawayTop intel Dem: Trump Jr. refused to answer questions about Trump Tower discussions with father House panel interviews Podesta after Trump dossier revelation Texas lawmaker says GOP colleague should resign over lewd photo MORE (R-Texas) announced the bill on Friday, drawing renewed attention to concerns in Congress about the firms and their relationship with the Chinese government.
USA telecoms carrier AT&T has dropped plans to sell Chinese brand Huawei's smartphones in the United States, dealing a setback to the No. 3 global phone maker's expansion plans, according to news reports. It is expected to launch big in the United States, but carrier partner AT&T dropped off of the deal at the last minute.
Conaway's bill cites all the money quotes from past government reports, including the 2011 Congressional investigation that led to the 2012 bill, a U.S. China Commission that found ZTE, Huawei and others are "directly subject to direction by the Chinese Communist Party", and comments from former Central Intelligence Agency head General Michael Hayden who claimed Huawei had '"shared with the Chinese state intimate and extensive knowledge of foreign telecommunications systems it is involved with". Although the bill targets telecommunication equipment manufactured by both Huawei and ZTE, it could have a ripple effect on their smartphone business.
Huawei faced a similar issue in 2012 when the U.S. lawmakers claimed there were long-term security risks linked with the company's network equipment and services, leading it to pull out of the usa market.More news: Adobe Systems' (ADBE) Buy Rating Reaffirmed at Robert W. Baird
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America's second largest mobile carrier, AT&T, has just backed out from a deal with Huawei, Wall Street Journal reports.
"We win the trust of the Chinese carriers, we win the trust of the emerging markets. and also we win the trust of the global carriers, all the European and Japanese carriers", he said.
Not signing this deal with AT&T won't completely knock Huawei out of the US market, but the Mate 10 Pro won't sell anywhere near as well as they anticipated.
Four Republicans have signed on as cosponsors of the new legislation. ZTE was fined over $1 billion previous year after admitting to violating US sanctions by shipping equipment to Iran and North Korea.