US might be taking the Chinese paranoia to a whole new level by baring American telecommunication operators from using any Chinese equipment in their 5G program. This will certainly be a major blow for both parties as initial work commissioned by operators like AT&T and Verizon will have to be halted and new partners have to be sourced.
Reports from Wall Street Journal claims the Trump administration will require 5G equipment’s used in the country must be manufactured outside China on fear that the said Government could install backdoors into the hardware and spy on US Government, its citizens and infrastructure. As far fetched as this may be, US is not taking any chances and companies like Nokia and Ericsson are already talking to suppliers to meet these demands as they look into capturing the market. This does not bode well for Chinese suppliers at all, they could just give up US market all together and look at other nations, but missing out on the largest purchaser in the world will have its impacts. For instance US could chose to block nations that use non-compliant equipment and bar them as well, it can also arm twist American company’s likes Amazon, Google and Facebook to follow suit.
Although there is no official statement from White House on the decree, vendors are already taking precautionary steps to avoid losing business, Super Micro has moved its production outside China to give assurance to its clientele.