“U.S. is considering requirement that 5G equipment should be made outside of China.

The government of US President Trump would consider requiring 5G equipment used in the US to be designed and manufactured outside China. That’s what the initiates report to The Wall Street Journal.

Last month, the US President ordered that some of the network equipment and services produced abroad should no longer be used because of concerns about cyber security. As a result, a 150-day investigation into the supply chain of the U.S. telecom companies began. As part of this, U.S. officials are asking telecom equipment manufacturers if they can develop hardware for the U.S. outside of China. These include routers, switches and telecoms towers.

According to the insiders, the conversations are still at an early and informal stage. However, the presidential order requires a list of proposed rules and regulations to be submitted at the end of the 150 days. Those 150 days end in October. The adoption and implementation of the proposals can take months or years.

The proposals could ensure that the largest companies selling equipment to wireless providers in the US – Nokia and Ericsson – would have to get their largest operations from China in order to be able to deliver them to the US. The US is the largest market in the telecom equipment and related services and infrastructure industry. However, there is no major American manufacturer of such equipment.

Concerns about espionage

The order follows years of concern about espionage by the Chinese government through equipment made in China. U.S. officials fear that security holes may be made in the equipment, which could be misused for espionage or to remotely control or disable the equipment.

Most of the telecom equipment of Chinese companies can no longer be used in the US. This mainly concerns Huawei, who leads the telecom equipment market. Huawei himself has said on several occasions that there is no evidence for the US claims. Since May, the company has no longer been allowed to purchase services and products made in the United States.

After Huawei, Nokia and Ericsson are the largest manufacturers of telecommunications equipment. However, many of their products are made in China. By 2018, an estimated 45 percent of Ericsson’s manufacturing facility areas were Chinese areas, and 10 percent of Nokia’s share. Ericsson was operating at a global capacity of 75 percent in 2018, suggesting that the company would be able to move production to other countries.