The U.S. government is urging allied nations to avoid using telecommunications equipment from China’s Huawei Technologies Company, even though some of those countries have already made large purchases of Huawei equipment, according to a report published Friday.

The U.S. has expressed concerns that Chinese military and intelligence units have compromised Huawei products, posing security risks.

The Wall Street Journal reported on Friday that U.S. officials are concerned about host countries using Huawei equipment in close proximity to American military bases and about Chinese tech compromising the security of next-generation 5G wireless networks. The U.S. military has some dedicated equipment for its most sensitive communications, but a great deal of the communications traffic from American installations in foreign countries passes through local telecom networks.

American officials are offering detailed briefings on the security risks posed by Chinese equipment:

The briefings are aimed at dissuading governments and telecom executives from using Huawei network components in both government and commercially operated networks. A core focus of the briefings is Beijing’s ability to force Chinese corporations to comply with government requests from government authorities, a U.S. official said. The talking points also emphasize how wireless and internet networks in a few years could be more susceptible to cyberattacks or espionage, people familiar with the briefings said. Today’s cellular-tower equipment, for instance, is largely isolated from the “core” systems that transfer much of a network’s voice and data traffic. But in the 5G networks telecom carriers are preparing to install, cellular-tower hardware will take over some tasks from the core—and that hardware could potentially be used to disrupt the core via cyberattacks. For that reason, U.S. officials worry that Huawei or ZTE cellular-tower equipment could compromise swaths of a telecom network. Huawei is the world’s No. 2 smartphone maker behind Samsung Electronics Co. It is the global leader for telecom equipment, such as the hardware that goes into cellular towers, internet networks and other infrastructure that enables modern communication. The company has been all but shut out of that market in the U.S. after a 2012 congressional report labeled it a national-security threat. American officials say the company could be compelled by Beijing to use its knowledge of its components to snoop on or disrupt telecommunications networks.

The Journal noted American officials are not alone in these concerns. Australia has already banned Huawei and another Chinese company, ZTE, from participating in its 5G network, while the U.K. is conducting a telecom security review that does not specifically name any companies but may be motivated by concerns about Huawei, whose products are popular in Britain. The WSJ article also mentions a “new wariness” toward Huawei in Germany and the possibility of restrictions on its products in Japan.

Unfortunately for concerned U.S. policymakers, Chinese technology is already well established in many allied countries. Italian telecom executives reportedly told U.S. officials they simply cannot stop using Huawei and ZTE products because the Chinese equipment is inexpensive and flexible. A British telecom executive described Huawei as the “only true 5G supplier right now” to the Journal.

Reuters reported on Friday that Huawei has signed 22 commercial contracts for 5G networks so far and is opening an information security lab in Germany to help defuse security concerns before auctions for 5G network spectrum next year.

A group of senior German officials is mounting a last-ditch effort to ban Chinese companies from the 5G project. The German foreign and interior ministries are said to be especially concerned about Chinese participation after speaking with their counterparts in the United States and Australia.

“There is serious concern. If it were up to me we would do what the Australians are doing,” one German official said, referring to Australia’s ban on Huawei and ZTE. Even the German left, which is generally opposed to freezing entire countries out of German markets, has expressed apprehension about Huawei and pointed to Chinese cybersecurity laws that literally require all Chinese companies to “collaborate in national intelligence work.”

Huawei has consistently denied allegations that it works with Chinese intelligence and issued such a response to the Journal piece on Friday:

No Chinese corporation has a good answer to the simple truth that Chinese law absolutely requires them to work with Beijing’s military and intelligence operations upon demand. Even if it were true that Huawei is not currently injecting backdoors and other security flaws into its products for the benefit of Chinese intelligence, the government could compel it to do so tomorrow and arrest its executives instantly if they hesitated to comply.

The Wall Street Journal reported on Friday that stocks in Chinese tech companies are dropping as a result of the U.S. campaign against them, and indeed because of the Journal’s own reporting on that campaign. Conversely, the shares of European competitors to Huawei and ZTE such as Ericsson and Nokia are rising as the looming possibility of bans or caps on Chinese products creates market opportunities for them. The Chinese government has denounced U.S. warnings about the security of Huawei and ZTE products as protectionist schemes to suppress Chinese competition and create market share for American and European companies. </s> HONG KONG (Reuters) - China’s Huawei Technologies Co Ltd has filed a legal motion seeking to declare a U.S. defense law unconstitutional, in the telecom equipment maker’s latest bid to fight sanctions from Washington that threaten to push it out of global markets.

The motion for summary judgment in its lawsuit against the U.S. government, filed late on Tuesday in the U.S. District Court for the Eastern District of Texas, asks a judge to declare the 2019 National Defense Authorization Act (NDAA) unconstitutional. Huawei filed its lawsuit in March.

The NDAA bill, passed by the U.S. Congress last summer, places a broad ban on federal agencies and their contractors from using Huawei equipment on national security grounds, citing the company’s ties with the Chinese government.

Huawei, the world’s largest telecoms network gear maker, has repeatedly denied it is controlled by the Chinese government, military or intelligence services.

U.S. Secretary of State Mike Pompeo kept up the pressure on Huawei on Wednesday.

“Huawei is an instrument of the Chinese government,” Pompeo said in an interview with Fox Business Network. “They’re deeply connected. It’s something that’s hard for Americans to understand.”

Glen Nager, a partner at law firm Jones Day and lead counsel for Huawei, told Reuters the U.S. court had agreed on a schedule to hold hearings in September on motions by opposing sides.

Some legal experts said Huawei’s lawsuit was likely to be dismissed because U.S. courts are reluctant to second-guess national security determinations by other branches of government.

The lawsuit “will be an uphill battle because Congress has broad authority to protect us from perceived national security threats,” said Franklin Turner, a government contracts lawyer at McCarter & English.

In November 2018, a federal appeals court rejected a similar lawsuit filed by Russian cybersecurity firm Kaspersky Lab, which was challenging a ban on the use of the company’s software in U.S. government networks.

Earlier this month, the U.S. Commerce Department put Huawei on a trade blacklist that bans companies from doing business with the Chinese firm, a move which immediately disrupted the global tech sector.

Huawei’s chief legal officer, Song Liuping, on Wednesday said the company was reviewing ways to fight the U.S. ban, which he said was affecting its more than 1,200 suppliers and threatened to affect its 3 billion customers in 170 countries.

Song said Washington’s use of administrative orders and laws to punish a single company “sets a very dangerous precedent.”

“Today it is telecom and Huawei, tomorrow it could be your company, your industry, your customers,” he told reporters at Huawei’s headquarters in Shenzhen.

The ban, along with separate accusations of bank fraud and corporate theft that the United States has made against Huawei and its chief financial officer, has exacerbated the trade war between Beijing and Washington.

Huawei, which has been given a 90-day reprieve from the ban, has denied its products pose a security threat and protested Washington’s attempts to limit its business.

Vincent Pang, Huawei’s senior vice president and head of corporate communications, said the executive order and blacklist had transcended the boundaries of normal market competition.

“This could lead to the start of the fragmentation of the global tech ecosystem and standards,” Pang said on Wednesday at Huawei’s headquarters.

Pang also said he did not expect the “political” situation to delay the introduction in China of fifth-generation (5G) network technology. </s> People walk past a sign board of Huawei at CES (Consumer Electronics Show) Asia 2018 in Shanghai, China on June 14, 2018. (Aly Song/Reuters)

The U.S. government is trying to persuade wireless and internet providers in allied countries to avoid telecommunications equipment from China’s Huawei Technologies, the Wall Street Journal reported on Nov. 22.

The move would further pile pressure on the world’s biggest telecom gear maker, which is under scrutiny from Western intelligence agencies for its perceived ties to China’s government and the possibility its equipment could be used for espionage.

U.S. officials have reached out to their government counterparts and telecom executives in friendly countries where Huawei equipment is already in wide use about what they see as cybersecurity risks, according to the WSJ report, which cited unnamed people familiar with the situation.

The United States has already largely barred Huawei from supplying its government and contractors, while Australia has banned the company from supplying equipment for a 5G mobile network.

Huawei is one of several Chinese tech companies that have come under U.S. government scrutiny as a trade war between the two countries escalates.

On Friday, the Hong Kong shares of rival ZTE Corp fell as much as 5.6 percent, dragging down the sector. They recouped some losses to trade down 2 percent around midday, while the firm’s Shenzhen shares were down 3 percent.

ZTE’s value has nearly halved this year, battered by a three-month U.S. government ban on American firms selling parts to the firm, and a subsequent $1.4 billion settlement.

On Friday, an index tracking major telecoms firms on the mainland dropped more than 3 percent.

Washington has been considering increasing financial aid for telecommunications development in countries that shun Chinese-made equipment, the WSJ reported on Thursday.

One of the government’s concerns is based on the use of Chinese telecom equipment in countries that host U.S. military bases, such as Germany, Italy and Japan, the report added.

A U.S. Department of Commerce spokesman said in a statement that the department would remain vigilant against any threat to U.S. national security.

Huawei did not immediately respond to a Reuters request for comment.

Earlier this week, Huawei said it had signed 22 commercial contracts for 5G networks.

It will also open a new information security lab in Germany that will enable source code reviews, in a step aimed at winning regulators’ confidence before the country’s 5G mobile spectrum auction, a German regulator told Reuters last month. </s> Huawei is asking a federal judge in Texas to strike down federal legislation passed last year that banned Huawei—by name—from selling telecommunications equipment to the federal government. Huawei argues that the legislation violates the Constitution's rule against bills of attainder, laws that single out particular people for punishment.

Congress passed the most recent National Defense Authorization Act last August; Huawei launched its legal challenge against the law in March. The company filed a motion for summary judgment in the case on Tuesday. This is a motion that asks the judge to rule on the legal merits in the case prior to the discovery phase, when the two parties get to demand documents from one another to help them build their cases. Huawei hopes to avoid discovery because it could drag on for many months while Huawei is frozen out of competing for federal telecommunications business.

The ban passed last year empowers the Secretary of Defense to ban companies from supplying equipment to the federal government—or contractors using federal funds—if he determines they have ties to the Chinese government. Companies put on this list have an opportunity to appeal the decision to the courts.

But the law singles two companies out by name for special treatment—Huawei and ZTE. These two companies are subject to a perpetual ban on competing for federal business with no provision for judicial review. And that, Huawei argues, violates the US Constitution.

Huawei's legal brief points to a number of past examples when the courts have struck down legislation that singled out particular individuals or groups. For example, in 1946 the Supreme Court struck down wartime legislation zeroing out the salaries of three specific, named government employees with communist sympathies. While Congress has the power to decide how to spend taxpayer money, the high court ruled, that couldn't justify legislation that was clearly designed to punish the men for their past associations or conduct.

Huawei argues that exactly the same reasoning applies in its own case. During last year's debate over the NDAA, sponsors of the legislation made it clear that their goal was to punish Huawei for allegedly stealing American technology and conspiring with the Chinese government.

Huawei and ZTE "have proven themselves to be untrustworthy, and at this point I think the only fitting punishment would be to give them the death penalty-that is, to put them out of business in the United States," said Sen. Tom Cotton (R-Ark.) last June.

But Huawei argues that the Constitution doesn't allow Congress to unilaterally single out individuals or companies for punishment. To exclude Huawei or ZTE from federal contracts, Congress must pass a law providing general criteria for excluding companies from competing for federal business—and then let the executive and judicial branches sort out which companies meet the criteria. Indeed, that's how the law treats every company other than ZTE and Huawei, and Huawei argues that it is entitled to the same due process.

The 2018 legislation challenged by this Huawei lawsuit is separate from a recent decision by the Trump administration to ban US companies from supplying Huawei with American-made technology. The Trump administration's move may pose a more serious threat to Huawei because Huawei depends on a number of US-made technologies, especially software. </s> Google is restricting future business with Huawei, cutting off access to its Android operating system and its popular apps, after the Trump administration escalated a crackdown on the Chinese tech firm.

Google’s suspension, first reported by Reuters, amounts to a major blow to the world’s largest telecommunications equipment maker, which will no longer receive access and support for Google’s proprietary apps like Gmail, YouTube and Chrome.

The open source version of Android will still be available to Huawei, according to the report, but the Chinese tech giant will immediately lose access to updates to the operating system. And though existing Huawei users can still download popular Google apps through the Google Play store, they won’t be available on future Huawei handsets.

People who already own Huawei phones will not see a sudden disappearance of their services.

“We are complying with the order and reviewing the implications,” Google said in a statement Monday. “For users of our services, Google Play and the security protections from Google Play Protect will continue to function on existing Huawei devices.”

Google’s suspension is the latest blow against Huawei. Last week, the U.S. government added Huawei to its “Entity List,” forcing the company to obtain a U.S. government license to buy American technology. Known to some as the “death penalty,” the designation makes it virtually impossible for firms to survive once U.S. businesses cut off their dealings.

The penalty was seen as a dramatic escalation of the economic clash between the Trump administration and China.

The Commerce Department said it had initiated the crackdown because Huawei “is engaged in activities that are contrary to U.S. national security or foreign policy interest.” The Department of Justice has also accused it of violating Iran sanctions.

The listing will have an immediate affect on the telecommunications company, which has significant backing from the Chinese government. Huawei said last week that it spends more than $1 out of every $7 of its annual $70 billion procurement budget buying equipment from U.S. companies. The ban could also hinder Huawei’s ability to produce its latest equipment since the company relies on U.S. suppliers for components including wireless chips, antennas and handset operating software.

In a statement Monday, Huawei said it has made “substantial contributions” to Android’s global ecosystem; 2.5 billion devices around the world run on Android. The company said it will continue to provide security updates and after-sales services to owners of its smartphones and tablets.

According to data released before the U.S. government listing, Huawei claimed 19 percent of the global smartphone market, the research firm IDC said, behind only Samsung’s 23.1 percent, which was on the decline. </s> Google has suspended Huawei’s access to updates of its Android operating system and chipmakers have reportedly cut off supplies to the Chinese telecoms company, after the US government added it to a trade blacklist last week.

Google said it was complying with an executive order issued by Donald Trump and was reviewing the “implications”, later adding that Google Play – through which Google allows users to download apps – and the security features of its antivirus software Google Play Protect would continue on existing Huawei devices. New versions of its smartphones outside China would lose access to popular applications and services including Google Play, Maps and the Gmail app.

Huawei will continue to have access to the version of the Android operating system available through the open source licence that is free to anyone who wishes to use it. But, according to Reuters who first reported the ban on Sunday, Google will stop providing technical support and collaboration for Android and Google services.

Q&A Why is Huawei controversial? Show Hide Huawei is a Chinese telecoms company founded in 1987. Politicians in the US have alleged that Huawei’s forthcoming 5G mobile phone networks could be hacked by Chinese spies to eavesdrop on sensitive phone calls and gain access to counter-terrorist operations. Allies who allow Huawei technology inside their 5G networks have been told they may be frozen out of US intelligence sharing. Australia, New Zealand and Japan have banned Huawei from their 5G networks. In the UK, BT has excluded Huawei telecoms infrastructure from its own 5G rollout and removed some of its equipment from the 4G network. In January 2019 Vodafone said it had decided to 'pause' the use of Huawei equipment in its core networks across Europe. The UK's defence secretary Gavin Williamson was sacked by prime minister Theresa May after a leak revealed the sensitive decision that the UK would not be totally banning Huawei from 5G projects.

Poland’s internal affairs minister, Joachim Brudziński, has called for the European Union and Nato to work on a joint position over whether to exclude Huawei from their markets, after an Huawei employee was arrested on spying charges. Much of the doubt surrounding Huawei stems from founder Ren Zhengfei’s background in China's People’s Liberation Army between 1974 and 1983, where he was an engineer. His daughter, Huawei’s senior executive Meng Wanzhou, was arrested in Canada in December 2018 over allegations of Iran-sanctions violations, and she awaits extradition to the US. Ren, referring to trade issues between the US and China, says the company is 'like a small sesame seed, stuck in the middle of conflict between two great powers'. Photograph: Mark Schiefelbein/AP

Huawei responded late Monday afternoon, promising to continue providing security updates and after-sale services for its smartphones and tablets. It did not clarify what the ban will mean for new Huawei phones but instead underscored its previous cooperation with Android.

“Huawei has made substantial contributions to the development and growth of Android around the world,” it said. “As one of Android’s key global partners, we have worked closely with their open-source platform to develop an ecosystem that has benefited both users and the industry.”

A spokesman for China’s ministry of foreign affairs, Lu Kang, said Beijing would “support Chinese enterprises in defending their legitimate rights through legal methods”.

Observers say Chinese countermeasures could include encouraging a consumer boycott of US goods, such as Apple products. China is Apple’s third largest market by sales volume. Increased inspections or added regulatory hurdles are other options. In 2014, amid US accusations of Chinese cyber-theft, Microsoft offices in China were subjected to raids by inspectors.

Huawei has previously said it is developing its own backup operating system in case it was blocked from using US software.

In an interview in March with the German publication Die Welt, Richard Yu, the head of the company’s consumer division, said the company had a “plan B”. He said: “We have prepared our own operating system. Should it ever happen that we can no longer use these systems, we would be prepared.”

Chipmakers such as Intel, Qualcomm, Xilinx, and Broadcom have told employees they will not supply chips to Huawei until further notice, Bloomberg reported on Monday, citing people familiar with the matter.

Huawei, which relies on chips from the US, has reportedly been stockpiling the chips and other components in anticipation of the ban. In an interview on Saturday, the Huawei chief executive, Ren Zhengfei, said the company would be “fine” without US chips.

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The moves come after the Trump administration officially added the telecoms manufacturer to a trade blacklist on Thursday, declaring a national economic emergency to ban the technology and services of “foreign adversaries”. The blacklist immediately led to restrictions that will make it extremely difficult for the firm to do business with US companies.

In another development in the growing trade war between the two countries, Trump claimed in an interview on Fox on Sunday night that his policy of imposing tariffs on Chinese goods was already bearing fruit by encouraging companies to move manufacturing to other countries.

The latest restrictions are likely to hit Huawei’s European business, its second-biggest market, because it licenses many of its mobile phone services from Google in Europe.

Geoff Blaber, the vice-president of research at the market research firm CCS Insight, told Reuters: “Having those apps is critical for smartphone makers to stay competitive in regions like Europe.”

Google’s suspension follows a report last week calling for Huawei to be prevented from supplying 5G mobile networks in the UK, because its operations are “subject to influence by the Chinese state”.

The research, by a Conservative MP and two academics, said a decision announced by Theresa May last month, after a fraught meeting of the national security council (NSC), to allow the company to supply “non-core” equipment should be overturned because using the company’s technology presents “risks”.

In the report by the Henry Jackson Society thinktank, the authors claimed Huawei “has long been accused of espionage” – a claim repeatedly denied by the firm – and noted that “while there are no definitely proven cases”, a precautionary principle should be adopted.

The British government has been pressured by partner intelligence agencies in the US and Australia to reconsider letting the Shenzhen-based multinational participate in the UK’s 5G network.

In April, May provisionally approved the use of Huawei technology for parts of the networks after a meeting of the NSC. A leaked account of the meeting said five cabinet ministers had raised concerns about the company.

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Robert Strayer, a deputy assistant secretary at the US state department, warned last month that the UK’s proposal to adopt Huawei technology risked affecting intelligence cooperation with the US. He claimed the Chinese firm “was not a trusted vendor” and any use of its technology for 5G was a risk.

Australia, which also shares intelligence with the UK, has already moved to ban Huawei as a supplier for its future 5G network.

Huawei has always insisted it is a privately held company, independent of the Chinese state, owned largely by its employees, and has worked supplying phone technology in the UK for 15 years without problems. </s> Ms Meng at a capital investment forum in Moscow in 2014. Huawei's chief financial officer was arrested in Canada on Dec 1 and faces extradition to the US. She is the daughter of the company's founder.

A TOP executive and daughter of the founder of Chinese telecom giant Huawei has been arrested in Canada and faces extradition to the United States, officials said on Thursday, angering Beijing days into a trade war truce with the US.

The detention of Meng Wanzhou, Huawei's chief financial officer, comes after American authorities reportedly launched an investigation into suspected violations of Iran sanctions by Huawei, which was already under scrutiny by US intelligence officials who deemed the company a national security threat.

The arrest stirred tensions just as the United States and China agreed to a ceasefire in their trade spat while negotiators seek a deal within three months.

News of her detention rippled through stock markets in Asia, particularly Shanghai and Hong Kong, with tech firms among the worst hit. By lunch, Shanghai was 1.3 per cent lower while Hong Kong was 2.6 per cent off.

"China is working creatively to undermine our national security interests, and the United States and our allies can't sit on the sidelines," US Senator Ben Sasse in a statement linking the arrest to US sanctions against Iran.

"Sometimes Chinese aggression is explicitly state-sponsored and sometimes it's laundered through many of Beijing's so-called 'private' sector entities that are in bed with (President) Xi (Jinping)'s communist party," he added.

Ms Meng was arrested in the western city of Vancouver on Dec 1, Canada's ministry of justice said in a statement.

The ministry said the US is seeking her extradition and she faces a bail hearing on Friday, adding it could not provide further details due to a publication ban sought by Ms Meng, whose father, Huawei founder Ren Zhengfei, is a former Chinese People's Liberation Army engineer.

The arrest occurred on the same day that US President Donald Trump and Mr Xi struck the trade war truce at a summit in Argentina.

"The Chinese side firmly opposes and strongly protests over such kind of actions which seriously harmed the human rights of the victim," the embassy said in a statement.

"The Chinese side has lodged stern representations with the US and Canadian side, and urged them to immediately correct the wrongdoing and restore the personal freedom of Ms Meng Wanzhou."

Huawei said it was unaware of any wrongdoing by Ms Meng and was provided "very little information" about the charges.

"Huawei complies with all applicable laws and regulations where it operates, including applicable export control and sanction laws and regulations of the UN, US and EU," the company said in a statement.

The Wall Street Journal reported in April that US Department of Justice had opened an investigation into suspected violations of Iran sanctions by Huawei.

The New York Times said the company had been subpoenaed by the Commerce and Treasury Departments over alleged violations of Iran and North Korea sanctions.

Huawei is not the first Chinese telecoms equipment firm to face the ire of US authorities.

Earlier this year, the US imposed a seven-year ban on the sale of crucial US components to Chinese smartphone maker ZTE after finding it had failed to take action against staff who were responsible for violating trade sanctions against Iran and North Korea.

The ban nearly killed the Chinese tech company, which said it was forced to cease major operations in May. A month later, Washington and Beijing reached a deal that would strike ZTE from the sanctions list - just days after China reportedly offered to ramp up purchases of American goods to help cut the yawning trade imbalance with the US. American officials denied any connection between the two.

In exchange, ZTE agreed to pay a hefty US$1 billion fine and put an additional US$400 million in escrow in case of future violations. It was also ordered to replace its board of directors and retain outside monitors.

The case showed that China is highly dependent on imports of US-made semiconductors or computer chips and reinforced Beijing's need to become self-reliant on this key technology.

Huawei is one of the world's largest telecommunications equipment and services providers.

But despite global success, its US business has been tightly constrained by worries it could undermine American competitors and that its cellphones and networking equipment, used widely in other countries, could provide Beijing with avenues for espionage.

In May, the Pentagon said that devices from Huawei and ZTE posed an "unacceptable" security risk. Personnel on US military bases are banned from buying equipment manufactured by the Chinese tech firms.

Over the summer, Australia barred Huawei from providing 5G technology for wireless networks in the country over espionage fears.

New Zealand followed suit in November, but said the issue was a technological one.

Britain's largest mobile provider too has joined the global ban on Huawei. On Wednesday, BT announced it was removing Huawei's telecommunications equipment from its 4G cellular network, following a warning from the head of MI6 foreign intelligence service that singled out the Chinese company as a potential security risk.

Despite being essentially barred from the critical US market, Huawei surpassed Apple to become the world's number two smartphone maker in the second quarter of this year. AFP </s> Google says it will stop offering Android updates for phones made by the Chinese telecom company Huawei. The move follows a U.S. executive order that American companies stop doing business with any foreign company that harms national security interests.

Google, owned by Alphabet, "has suspended business with Huawei that requires the transfer of hardware, software and technical services except those publicly available via open source licensing," Reuters first reported. In a statement, Google confirmed the news: "We are complying with the order and reviewing the implications," a spokesperson said, according to CNBC.

In practice, this means Huawei won't be able to license Google's Android operating system, so Huawei phone users will lose access to updates. Future versions of Huawei smartphones running Android won't be able to access popular Google apps including Gmail, YouTube, and the Google Play store – which lets users easily download third-party apps.

Huawei is one of the world's largest smartphone suppliers, second only to Samsung. In losing access to the latest Google software, Huawei may find it difficult to compete in the global smartphone market, CNN reports.

Google isn't the only company cutting ties with Huawei. American chipmakers such as Intel, Qualcomm and Broadcom have told their employees that they will stop supplying Huawei, Bloomberg reported. And the Nikkei Asian Review reported that the German chipmaker Infineon has also stopped shipments to Huawei.

The Trump administration last week restricted the sale of U.S. technology which seemed aimed at Huawei. An executive order signed by the president declared a "national emergency" and blocked U.S. companies from doing business with foreign tech companies that pose "an unacceptable risk to the national security of the United States." The Commerce Department said it would add Huawei and its subsidiaries to a list of companies generally prohibited from buying U.S. technology.

Huawei, which has denied allegations that it spies on its users, says it has been preparing for the possibility that it might lose access to American companies. In March, Richard Yu, CEO of Huawei's consumer products division, told a German newspaper that Huawei had prepared its own operating system in case it lost access to Android. "That's our plan B," Yu said. "But of course we prefer to work with the ecosystems of Google and Microsoft." The company has stockpiled enough chips to keep its phone business running for months, Bloomberg reports.

According to Ryan Koontz, an analyst with Rosenblatt Securities Inc., the U.S. ban could have a major impact on China's ability to build 5G networks, as Huawei is dependent on U.S. components like semiconductors.

"The extreme scenario of Huawei's telecom network unit failing would set China back many years and might even be viewed as an act of war by China," Koontz told Bloomberg. "Such a failure would have massive global telecom market implications." </s> VANCOUVER: Chinese telecom giant Huawei's chief financial officer faces US fraud charges related to sanctions-breaking business dealings with Iran, a Canadian court heard on Friday (Dec 7), a week after she was detained on an American extradition request.

Meng Wanzhou was arrested in Canada's Pacific coast city of Vancouver on Dec 1 while changing planes during a trip from Hong Kong to Mexico - ratcheting tensions between the United States and China just as the countries' leaders agreed a truce in their trade war.

A Canadian government lawyer asked the court to deny her bail, saying she has been accused of "conspiracy to defraud multiple financial institutions" and if convicted faces more than 30 years in prison.

She is specifically accused of lying to US banks about the use of a covert subsidiary to sell to Iran in breach of sanctions.

The lawyer said that Meng had personally denied to American bankers any direct connections between Huawei and the subsidiary, SkyCom, when in fact "SkyCom is Huawei." SkyCom's alleged sanctions breaches occurred from 2009 to 2014.

He suggested that Meng has also shown a pattern of avoiding the United States over the past year since becoming aware of the investigation into the matter, argued that she has no ties to Canada and has access to vast wealth and political connections - and thus poses a flight risk.

Meng's detention in Canada came on the day of a summit at which US President Donald Trump and his Chinese counterpart Xi Jinping agreed to a truce in the escalating trade dispute opposing the two economic powerhouses.

China says Meng - the daughter of Huawei founder Ren Zhengfei, a former engineer in China's People's Liberation Army - has violated no laws in Canada or the United States and has demanded her release.

Washington and Beijing have exchanged steep tariffs on more than US$300 billion in total two-way trade, locking them in a conflict that has begun to eat into profits.

Trump tweeted Friday that negotiations to defuse the high stakes dispute were "going very well" but the messages since Meng's arrest have been mixed, roiling global stock markets.

Her appearance at the British Columbia Supreme Court in Vancouver is a prelude to an extradition process that could take months.

CNN, quoting an unnamed official, said the United States saw the arrest as providing leverage in US-China trade talks - although White House trade adviser Peter Navarro has denied any link to the dialogue.

On Friday, Beijing nevertheless alleged that Meng, known internally as the "princess" of Huawei and possible heir to the throne, had become a pawn in the dispute.

"The Chinese government should seriously mull over the US tendency to abuse legal procedures to suppress China's high-tech enterprises," said the nationalist tabloid Global Times in an editorial.

"Obviously, Washington is resorting to a despicable rogue's approach as it cannot stop Huawei's 5G advance in the market," it went on.

Meng spent most of the past week at a women's detention facility in a suburb of Vancouver.

If she is released on bail, she would likely have to surrender her passport and submit to electronic monitoring until she is discharged or surrendered for trial to the United States. All security costs would be borne by her.

The extradition process could take months, even years, if appeals are made in the case. The Vancouver Sun reported on Friday that Meng's husband Xiaozong Liu is believed to own at least one luxury home in the city.

Canada is one of more than 100 countries that have an extradition treaty with the United States, requiring it to cooperate with US Department of Justice requests to hand over suspects.

This longstanding treaty requires that the offence for which extradition is being sought is also a crime in Canada.

A Canadian court must decide if there is sufficient evidence to support the extradition, but then it is left to Canada's justice minister to sign the order.

On Thursday, Prime Minister Justin Trudeau defended Canada's arrest of Meng, saying politics played no part in the decision.

"I can assure everyone that we are a country (with) an independent judiciary," Trudeau told a tech conference in Montreal.

READ: Europe should be wary of Huawei, EU tech official says

Huawei's affordable smartphones have made strong inroads in the developing world, but the company has faced repeated setbacks in major Western economies over security concerns.

Earlier this week, Canadian officials said Ottawa was continuing to review Huawei's technology for use in upcoming fifth generation networks.

The company faces being shut out of Australia, New Zealand and US 5G rollouts, and British telecom group BT revealed on Wednesday it was removing Huawei equipment from its core cellular network.

The five nations together form the "Five Eyes" intelligence alliance.
The Institute of Electrical and Electronics Engineers (IEEE) bans Huawei scientists from reviewing submissions to its peer-reviewed journals, due to the "severe legal implications" of U.S. sanctions against the Chinese company.