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On eve of China summit, Biden administration subpoenas Chinese companies on possible security risks

Move shows administration will continue aspects of Trump’s tough stance toward China

Commerce Secretary Gina Raimondo called her agency's implementation of a Trump-era executive order "an important step" toward protecting "the security of American companies, American workers, and U.S. national security." (Susan Walsh/AP)
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The Biden administration said Wednesday that it has served subpoenas on multiple Chinese companies to seek information on possible national security risks, showing that at least some of the Trump administration’s tough policies on China are taking root in the new administration.

The announcement of the subpoenas came as Secretary of State Antony Blinken and national security adviser Jake Sullivan prepared to meet their Chinese counterparts in Anchorage on Thursday, the first administration meeting with Chinese officials.

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In issuing the subpoenas, the Commerce Department is implementing an executive order signed by President Trump in May 2019 that allowed the executive branch to prohibit the purchase of foreign-made communications equipment or services that could pose national security risks.

The Commerce Department declined to say which companies it subpoenaed, saying only that they “provide information and communications technology and services (ICTS) in the United States.”

“The Biden-Harris Administration has been clear that the unrestricted use of untrusted ICTS poses a national security risk,” Secretary of Commerce Gina Raimondo said in a statement.

“In issuing subpoenas today, we are taking an important step in collecting information that will allow us to make a determination for possible action that best protects the security of American companies, American workers, and U.S. national security,” she said. “The administration is firmly committed to taking a whole-of-government approach to ensure that untrusted companies cannot misappropriate and misuse data and ensuring that U.S. technology does not support China’s or other actors’ malign activities.”

One trade lawyer speculated that the list of subpoena recipients could potentially include the five companies the Federal Communications Commission last week officially deemed threats to national security — Huawei, ZTE, Hytera Communications, Hangzhou Hikvision Digital Technology Co., and Dahua Technology Co.

A Trump-era law requires the FCC to maintain a list of communications equipment that poses “an unacceptable risk to national security.”

Huawei, which has rejected accusations that it presents security risks, declined to comment on the subpoenas. The other companies couldn’t immediately be reached for comment.

Rod Hunter, a lawyer with Baker McKenzie and a former national security official in the George W. Bush administration, said the timing of the announcement, a day before the Anchorage talks, appeared significant.

“It’s kind of interesting they are doing it on the eve of the meeting,” he said. “You have to think this is not by accident they are issuing it now.”

The Trump administration designed the executive order to close what it saw as a gap in U.S. regulation. Other laws allowed the government to stop the military or other federal agencies from purchasing certain technology, or to stop foreign companies from acquiring sensitive U.S. technology companies.

The May 2019 executive order, which comes into full force this month, after the publication of the implementing rules, adds an extra layer of regulation by allowing the government to stop U.S. companies from buying certain equipment or services from entities deemed risky.

“The rule closes the circle at addressing threats to U.S. critical infrastructure by foreign telecom equipment that cannot be addressed by export controls, foreign direct investment controls, or procurement limitations,” said Kevin Wolf, a former senior Commerce official who is now a partner at Akin Gump Strauss Hauer & Feld.