Trump looks to ban China Mobile from United States market over security concerns

Roman Schwartz
July 5, 2018

Redl said the NTIA subsequently recommends that the Federal Communications Commission deny China Mobile's Section 214 license request.

Regardless of how it planned on offering its services, the NTIA (National Telecommunications and Information Administration) states China Mobile's entry to the market "would pose unacceptable national security and law enforcement risks", and the FCC is allegedly set to deny its application. "The extreme delay in granting the application is causing significant and unwarranted harm to China Mobile USA's business operations", the company said in its letter to the FCC at the time.

The news comes just after the USA stated an intention to impose additional tariffs on Chinese products, with further threats of additional taxes on up to $200 billion in Chinese imports in the event the country attempts retaliation as part of the ongoing trade war.

The Trump administration's stance on China Mobile follows several other recent moves against China and Chinese companies.

In response to the U.S. move, Chinese Foreign Ministry Spokesperson Lu Kang said: "We urge the relevant party in the USA to abandon the Cold war mentality and zero-sum game".

The FCC didn't immediately respond to a request for comment.

Asian stock markets wobbled on Monday amid rising US-China trade tensions.

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While the move may be a setback for China Mobil, it will not have almost the effect that a ban of sales of equipment made by USA companies to China's ZTE has had.

The US said it would remove the ban on ZTE if the company agreed to a $1bn penalty, changed its management and hired a compliance team picked by the US.

USA officials imposed the ban because of what they said were false statements by the firm regarding the illegal sale of goods to Iran and North Korea.

China Mobile, whose shares also trade on the New York Stock Exchange, had applied for a Section 214 facilities-based licence, which would give it the authority to build its own telecommunications network in the USA, connect this network to those run by domestic operators, and offer mobile, broadband and other telecoms services to consumers and commercial enterprises in the country. The company wasn't seeking to offer mobile services directly to USA customers, according to the U.S. filing.

FILE PHOTO: A security guard uses his mobile phone in front of a China Mobile store in Guangzhou, Guangdong province February 10, 2014.

The Trump administration is expected to bring into effect the first tranche of 25% tariffs on $34bn of Chinese goods.

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