-A lot of people see the word "Huawei"
and don't even know how to pronounce it.
Huawei is a Chinese electronics company founded in 1987
by former army officer Ren Zhengfei.
For Americans, it's not a big consumer brand,
but they're actually the second-largest cellphone
maker in the world behind Samsung.
They make very high-end cellphones with great cameras
that are sold at a much lower price than other premium brands.
-So why don't consumers in the United States
have access to these popular phones
that might be as good or better than the iPhone?
Well, it's a complicated answer
that involves much more than just cellphones.
-We're deeply concerned about the risks
of allowing any company or entity
that is beholden to foreign governments
that don't share our values to gain positions of power
inside our telecommunications network.
-The reason that they're in the crosshairs
of the US government is less
because of their cellphone manufacturing and more
because of their telecomm manufacturing.
-Huawei is the world's largest telecommunications
network provider.
Their network infrastructure,
including the technology needed for 5G,
is far cheaper than competitors Nokia and Ericsson.
And in some places, it's already going live.
In mid-July 2019, Monaco became the first European country
to begin using a Huawei-made 5G network.
-The question here is, if Huawei puts up all
this telecommunications equipment all over the world,
is there some way that they could sneak in a backdoor
that would allow the Chinese government
to listen in on this massive communications network?
-And while spying on our communications network
is a big concern,
there's a lot more that this 5G network is going to power,
like autonomous vehicles and many military applications.
Huawei's founder and CEO, Ren Zhengfei,
was an engineer and an officer in the People's Liberation Army.
This leads a lot of people to believe
that Huawei has close ties to the Chinese military
and the Chinese Communist Party.
But aside from that,
Huawei is positioned to be the leader
in the lucrative field of 5G.
Telecommunications giant Ericsson estimates
it'll be worth 1 point 2 trillion dollars by 2026.
This is why Huawei has found itself
at the center of tense trade negotiations
between the United States and China,
which has led to some drastic measures.
-Miss Meng, what's your reaction to the crimes unveiled today?
-So, the first time many Americans
probably heard the name Huawei in the news was in December
when the company's CFO and the daughter of the founder,
Meng Wanzhou, was arrested in Vancouver.
She was changing planes
and arrested by Canadian authorities
on an extradition request from the US government
for allegedly violating Iran sanctions.
-US prosecutors say Meng used a shell company
for Huawei's dealings with Iran,
misleading banks into approving millions of dollars
in transactions that violated sanctions.
-Huawei has been investigated for years for creating
shell companies, allegedly, and funneling equipment,
telecommunications equipment and other electronics, to Iran.
And there were questions immediately about
the implications for that arrest.
You know, what were the motivations?
Was this part of the larger trade agreement?
-And about a month after the indictment of Huawei's CFO,
more indictments came.
-First, I am announcing that a grand jury in Seattle
has returned an indictment,
that it alleges ten federal crimes by two affiliates
of telecommunications corporation Huawei Technologies.
-The Justice Department indictment alleges
that a Huawei employee stole trade secrets from T-Mobile
by stealing a smartphone-testing robot
from a research facility in his laptop bag.
Huawei claims this act was carried out by two employees
who acted on their own, violating company policy,
and who were then fired.
A Huawei employee was also arrested
in January 2019 in Poland
for suspected spying on behalf of the Chinese government.
This is why the US has been raising red flags
and lobbying its allies to ditch Huawei technology and its 5G.
So far, Huawei technology is banned in the United States,
Japan, Australia, and New Zealand.
Huawei has said that a ban on its 5G technology
will only lead countries to use inferior
yet more expensive alternatives.
And some allies have been more reluctant
to ban Huawei outright.
The UK Parliament's Science and Technology Committee
rejected a proposed ban on Huawei 5G tech,
saying that there are no technical grounds
for excluding Huawei entirely from the UK's 5G network,
though a British independent government-oversight group
did find basic yet significant security flaws
in Huawei's product code,
which Huawei had previously vowed to fix.
-You've seen some articles that suggest
maybe there are some backdoors,
but plenty people say what people have found
are really more bugs in the system,
and every telecommunications system has bugs.
-But whether it's backdoors or bugs,
it's really China's 2017 National Intelligence Law
that gives a lot of people concern.
It requires individuals and organizations
to assist with intelligence operations
if compelled to do so by the state.
-I think what lawmakers in the US have said
is that it doesn't even matter what the law in China says.
The Chinese government has so much power to act unilaterally.
Their theory is that even if Huawei wanted
to sort of protect their telecommunications equipment
to make it safe around the world
and free of any Chinese government meddling,
they wouldn't even be allowed to do that.
Now, Huawei absolutely denies that.
They say, you know, there's no way they would ever do this,
there's probably no way they could ever do this.
-And as trade talks between China and the United States
continued through the spring of 2019,
the Trump administration added an extra layer of pressure.
-President Trump signed an executive order on Wednesday
allowing the US to ban foreign telecommunications equipment
and services.
The order is meant to help protect the US
from foreign adversaries
taking advantage of technological vulnerabilities.
-They've been added to what's called the entity list,
which is kept by the US Department of Commerce,
and it's companies that really can't be trusted
to buy US technology.
This was a big deal because Huawei's actually
one of the largest buyers of US chips,
for instance, in the world.
-Being on the entity list doesn't just block chips
from being sold to Huawei.
It also blocks it from receiving updates
for Google's Android operating system,
which Huawei phones run on.
-Some people believed that the reason they were put on the list
was really less about national security,
which is the stated reason
and the whole reason that list exists in the first place,
and more because Huawei was being used
as a bargaining chip in trade agreements.
Lo and behold, in June 2019,
President Trump meets with Xi Jinping of China and agrees
to essentially remove this ban,
allow US companies to sell technology to Huawei.
And he says, you know, he did that because
US companies were upset,
and China's coming back to the table
and talking about, you know, trade negotiations again.
So, is Huawei a bargaining chip in trade negotiations
or are they a real national-security threat?
The waters are kind of muddy now.