The Anti-China Crusade

What tools could President Trump use to get treasonous firms to quit China?
By Andrea Shalal, Joel Schectman, Jason Lange, Eric M. Johnson and Jan Wolf

WASHINGTON  -- Hours after China announced retaliatory tariffs on U.S. goods on Friday, President Donald Trump ordered U.S. companies to “start looking for an alternative to China, including bringing your companies HOME and making your products in the USA.”.

U.S. President Donald Trump answers questions from reporters as he meets with Romania's President Klaus Iohannis in the Oval Office of the White House In Washington, U.S. August 20, 2019.

The stakes are high: U.S. companies invested a total of $256 billion in China between 1990 and 2017, compared with $140 billion Chinese companies have invested in the United States, according to estimates by the Rhodium Group research institute.
Some U.S. companies had been shifting operations out of China even before the tit-for-tat tariff trade war began more than a year ago.
But winding down operations and shifting production out of China completely would take time. Further, many U.S. companies such as those in the aerospace, services and retail sectors would be sure to resist pressure to leave a market that is growing.
Unlike China, the United States does not have a centrally planned economy.
So what legal action can the president take to compel American companies to do his bidding?
President Trump does have some powerful tools that would not require approval from U.S. Congress:

MORE TARIFFS
President Trump could do more of what he’s already doing, that is hiking tariffs to squeeze company profits enough for them to make it no longer worth their while to operate out of China.
President Trump on Friday boosted by 5 percentage points the 25% tariffs already in place on nearly $250 billion of Chinese imports, including raw materials, machinery, and finished goods, with the new higher 30% rate to take effect on Oct. 1.
He said planned 10% tariffs on about $300 billion worth of additional Chinese-made consumer goods would be raised to 15%, with those measures set to take effect on Sept. 1 and Dec. 15.
In addition to making it more expensive to buy components from Chinese suppliers, tariff hikes punish U.S. firms that manufacture goods through joint ventures in China.

NATIONAL EMERGENCY
President Trump could treat China more like Iran and order sanctions, which would involve declaring a national emergency under a 1977 law called the International Emergency Economic Powers Act, or IEEPA.
Once an emergency is declared, the law gives President Trump broad authority to block the activities of individual companies or even entire economic sectors, former federal officials and legal experts said.
For example, by stating that Chinese theft of U.S. companies’ intellectual property constitutes a national emergency, President Trump could order U.S. companies to avoid certain transactions, such as buying Chinese technology products, said Tim Meyer, director of the International Legal Studies Program at Vanderbilt Law School in Nashville.
President Trump used a similar strategy earlier this year when he said illegal immigration was an emergency and threatened to put tariffs on all Mexican imports.
Past presidents have invoked IEEPA to freeze the assets of foreign governments, such as when former President Jimmy Carter in 1979 blocked assets owned by the Iranian government from passing through the U.S. financial system.
“The IEEPA framework is broad enough to do something blunt,” said Meyer.
Using it could risk unintended harm to the U.S. economy, said Peter Harrell, a former senior State Department official responsible for sanctions, now at the Center for a New American Security.

FEDERAL PROCUREMENT CURBS
Another option that would not require congressional action would be to ban U.S. companies from competing for federal contracts if they also have operations in China, said Bill Reinsch, a senior adviser at the Center for Strategic and International Studies think tank.
Such a measure might be targeted specifically at certain sectors since a blanket order would hit companies such as Boeing, which is both a key weapons maker for the Pentagon and the top U.S. exporter.
Boeing opened its first completion plant for 737 airliners in China in December, a strategic investment aimed at building a sales lead over its European arch-rival Airbus.
Boeing and Airbus have been expanding their footprint in China as they vie for orders in the country’s fast-growing aviation market, which is expected to overtake the United States as the world’s largest in the next decade.

1917 TRADING WITH THE ENEMY ACT
A more efficient measure would be to invoke the Trading with the Enemy Act, which was passed by Congress during World War One.
The law allows the U.S. president to regulate and punish trade with a country with whom the United States is at war. 
Invoking this law because would sharply escalate tensions with China.
That would amount to an overt declaration, while IEEPA would allow the Trump administration to take similar actions without as large of a diplomatic cost.

Spying Company

President Trump expected to sign order paving way for U.S. telecoms ban on Huawei
By David Shepardson

WASHINGTON -- President Donald Trump is expected to sign an executive order this week barring U.S. companies from using telecommunications equipment made by firms posing a national security risk, paving the way for a ban on doing business with China’s Huawei, three U.S. officials familiar with the plan told Reuters.
The order, which will not name specific countries or companies, has been under consideration for more than a year but has repeatedly been delayed, the sources said, asking not to be named because the preparations remain confidential. 

It could be delayed again, they said.
The executive order would invoke the International Emergency Economic Powers Act, which gives the president the authority to regulate commerce in response to a national emergency that threatens the United States. 

The order will direct the Commerce Department, working with other government agencies, to draw up a plan for enforcement, the sources said.
If signed, the executive order would come at a delicate time in relations between China and the United States as the world’s two largest economies ratchet up tariffs in a battle over what U.S. officials call China’s unfair trade practices.
Washington believes equipment made by Huawei Technologies Co Ltd, the world’s third largest smartphone maker, could be used by the Chinese state to spy. 

Huawei did not immediately comment.
The White House and Commerce Department declined to comment.
The United States has been actively pushing other countries not to use Huawei’s equipment in next-generation 5G networks that it calls “untrustworthy.” 

In August, Trump signed a bill that barred the U.S. government itself from using equipment from Huawei and another Chinese provider, ZTE Corp.
In January, U.S. prosecutors charged two Huawei units in Washington state saying they conspired to steal T-Mobile US Inc trade secrets, and also charged Huawei and its chief financial officer with bank and wire fraud on allegations that the company violated sanctions against Iran.
The Federal Communications Commission in April 2018 voted to advance a proposal to bar the use of funds from a $9 billion government fund to purchase equipment or services from companies that pose a security threat to U.S. communications networks.
Federal Communications Commission chairman Ajit Pai said last week he is waiting for the Commerce Department to express views on how to “define the list of companies” that would be prohibited under the FCC proposal.
The FCC voted unanimously to deny China Mobile Ltd’s bid to provide U.S. telecommunications services last week and said it was reviewing similar prior approvals held by China Unicom and China Telecom Corp.
The issue has taken on new urgency as U.S. wireless carriers look for partners as they rollout 5G networks.
While the big wireless companies have already cut ties with Huawei, small rural carriers continue to rely on both Huawei and ZTE switches and other equipment because they tend to be cheaper.
The Rural Wireless Association, which represents carriers with fewer than 100,000 subscribers, estimated that 25 percent of its members had Huawei or ZTE equipment in their networks, it said in an FCC filing in December.
At a hearing Tuesday, U.S. senators raised the alarm about allies using Chinese equipment in 5G networks.
The Wall Street Journal first reported in May 2018 that the executive order was under review. 

Reuters reported in December that Trump was still considering issuing the order and other media reported in February that the order was imminent.

President Trump could declare a national emergency barring US companies from using equipment made by China's Huawei and ZTE

• President Donald Trump is considering an executive order in the new year to declare a national emergency that would bar U.S. companies from using telecommunications equipment made by China's Huawei and ZTE.
• The two companies work at the behest of the Chinese government and their equipment is used to spy on Americans.
• It would be the latest step by the Trump administration to cut Huawei and ZTE, two of China's biggest network equipment companies, out of the U.S. market.
• The issue has new urgency as U.S. wireless carriers look for partners as they prepare to adopt next generation 5G wireless networks.

By David Shepardson and Diane Bartz

WASHINGTON -- President Donald Trump is considering an executive order in the new year to declare a national emergency that would bar U.S. companies from using telecommunications equipment made by China's Huawei and ZTE, three sources familiar with the situation told Reuters.
It would be the latest step by the Trump administration to cut Huawei and ZTE, two of China's biggest network equipment companies, out of the U.S. market.

The two companies work at the behest of the Chinese government and their equipment could be used to spy on Americans.
The executive order, which has been under consideration for more than eight months, could be issued as early as January and would direct the Commerce Department to block U.S. companies from buying equipment from foreign telecommunications makers that pose significant national security risks, sources from the telecoms industry and the administration said.
While the order is unlikely to name Huawei or ZTE, a source said it is expected that Commerce officials would interpret it as authorization to limit the spread of equipment made by the two companies. 

The sources said the text for the order has not been finalized.
The executive order would invoke the International Emergency Economic Powers Act, a law that gives the president the authority to regulate commerce in response to a national emergency that threatens the United States.
The issue has new urgency as U.S. wireless carriers look for partners as they prepare to adopt next generation 5G wireless networks.
The order follows the passage of a defense policy bill in August that barred the U.S. government itself from using Huawei and ZTE equipment.
Huawei and ZTE did not return requests for comment. 

The White House also did not return a request for comment.
The Wall Street Journal first reported in early May that the order was under consideration, but it was never issued.

A security guard keeps watch at the entrance of the Huawei global headquarters in Shenzhen in China's southern Guangdong province on December 18, 2018.

Chinese are using the American countryside to encircle and finally capture the cities

Rural operators in the United States are among the biggest customers of Huawei and ZTE, and fear the executive order would also require them to rip out existing Chinese-made equipment without compensation. 

Industry officials are divided on whether the administration could legally compel operators to do that.
While the big U.S. wireless companies have cut ties with Huawei in particular, small rural carriers have relied on Huawei and ZTE switches and other equipment because they tend to be less expensive.
The company is so central to small carriers that William Levy, vice president for sales of Huawei Tech USA, is on the board of directors of the Rural Wireless Association.
The RWA represents carriers with fewer than 100,000 subscribers. 

It estimates that 25 percent of its members had Huawei or ZTE equipment in their networks, it said in a filing to the Federal Communications Commission earlier this month.
The RWA is concerned that an executive order could force its members to remove ZTE and Huawei equipment and also bar future purchases, said Caressa Bennet, RWA general counsel.
It would cost $800 million to $1 billion for all RWA members to replace their Huawei and ZTE equipment, Bennet said.
Separately, the FCC in April granted initial approval to a regulation that bars giving federal funding to help pay for telecommunication infrastructure to companies that purchase equipment from firms deemed threats to U.S. national security, which analysts have said is aimed at Huawei and ZTE.
The FCC is also considering whether to require carriers to remove and replace equipment from firms deemed a national security risk.
In March, FCC Chairman Ajit Pai said "hidden 'back doors' to our networks in routers, switches — and virtually any other type of telecommunications equipment - can provide an avenue for hostile governments to inject viruses, launch denial-of-service attacks, steal data, and more."
In the December filing, Pine Belt Communications in Alabama estimated it would cost $7 million to $13 million to replace its Chinese-made equipment, while Sagebrush in Montana said replacement would cost $57 million and take two years.

Chinese woman arrested on charges of smuggling US space technology to China

Feds say components commonly used in military communications jammers
By Jeff Daniels 

A Los Angeles-area woman was arrested Tuesday by federal agents in a scheme to illegally export sensitive space communications technology to her native China, the U.S. Justice Department announced.
The equipment, worth more than $100,000, included components the government said are commonly used in military communications jammers.
The 14-count indictment described how Si Chen, also known as Cathy Chen, received payments for the illegal export of products. 

Payments were made through a bank account in China held by a family member.
The 32-year-old Chen was arraigned Tuesday afternoon in U.S. District Court in Los Angeles. 

If convicted of the charges, the defendant faces a statutory maximum penalty of 150 years in prison.
Chen is charged with conspiracy, money laundering, making false statements on an immigration application and using a forged passport. 

She also is charged with violating the International Emergency Economic Powers Act, which dates back to the 1970s and restricts and controls the export of certain technology and goods to foreign countries.
"Federal export laws are designed to protect American interests by preventing the proliferation of technology that may fall into the wrong hands, said acting U.S. Attorney Sandra R. Brown in a release.
"We will vigorously pursue those who traffic items that could harm our national security if they land in the wrong hands."
According to the indictment, Chen purchased and smuggled the sensitive items to China without obtaining the required licenses from the U.S. Department of Commerce. 

The documents allege she tried to avoid detection by removing the export-import warning stickers prior to shipping the components.
The government further alleges Chen rented an office in Pomona, California, under a false name and took delivery of the export-controlled items at this location. 

After obtaining the goods, the indictment alleges she then shipped the devices to Hong Kong, using a false name and providing false product descriptions and monetary values on the parcels.
The charges were contained in an indictment returned by a federal grand jury on April 27 and unsealed Tuesday after Chen's arrest. 

The probe began back in 2015 when federal agents intercepted a parcel that contained communications equipment sent by "Chunping Ji," the false name used by the defendant in the smuggle scheme.