President Donald Trump signed the so-called “rip and replace” bill Thursday, legislation that effectively cuts off access to U.S. subsidies for companies like Huawei Technologies, ZTE, and any other foreign manufacturer that officials deem a national security risk, per a Reuters report.
The Secure and Trusted Communications Networks Act, which previously breezed through both the House and Senate with unanimous approval, also allocates $1 billion to help rural wireless carriers “rip” out their existing equipment and infrastructure from these banned providers and replace them.
The U.S. Justice Department has issued multiple indictments against Huawei, the world leader in telecommunications equipment and one of its largest cell phone manufacturers, alleging that the company conspired to steal trade secrets, commit wire fraud, and engage in illegal racketeering. Huawei firmly denies these allegations, calling them “unfair and unfounded,” and argues that these claims are merely a tool for officials to hamper competition and leverage U.S. businesses above its own.
In a press statement, the White House said this legislation “will help protect our nation’s vital communications network and also ensures the United States reaches its 5G potential.”
And while actually appropriating these $1 billion in grants will come later, the Rural Wireless Association still called the measure an important “first-step in securing necessary funding to replace rural carriers,” Reuters reported.
This ban comes as Huawei continues to make headway in its attempts to roll out its 5G network overseas. Last month, Huawei chairman Liang Hua announced that the company wants to invest 200 million euros ($221 million) to build a mobile base station plant in France to help them supply the entire European market with its networking equipment. French authorities also plan to approve Huawei’s gear for use in the nation’s 5G network, according to a recent Reuters report.