When it comes to production, many companies around the world, not just the US, turn to China. This is because China is known for their inexpensive production, which is why many companies outsource to them to help increase their profit margins and lower their costs. However, the US government could be considering some changes to that practice when it comes to 5G equipment.
According to a report from The Wall Street Journal, the US government is said to be considering making it a requirement that 5G equipment be made outside of the US. This seems to be an escalation in the trade war between both countries, where not only has the US government banned the use of Huawei’s equipment, but they have also blacklisted the company from doing business with US companies.
Now it seems that whoever will supply US carriers with 5G equipment, even if they aren’t a Chinese company, it seems that their equipment can’t even be made in China. This is a huge deal because it would require existing companies to start building production facilities outside of China, which is not only costly, but it could take time as well.
According to Michael Wessel, who is a member of the U.S.-China Economic and Security Review Commission, “While the primary national-security concerns center on Chinese-owned firms, the equipment produced by any firm operating in China is at greater risk for vulnerabilities because of access to personnel and facilities.”