US FCC Moves to Cut China Tech Out with 2 New Proposals

The U.S. Federal Communications Commission voted to advance two proposals aimed at curbing China’s role in the American tech supply chain, targeting everything from product testing to data center operations and escalating trade tensions.

"These restrictions impact the hard-won stability of China-U.S. economic and trade relations and go against the consensus reached by the leaders of the two countries," China's Ministry of Commerce said in a statement, expressing firm opposition.

The first proposal would ban Chinese labs from testing electronic devices for the U.S. market, a significant move considering an estimated 75% of such devices are currently tested in China. The second would bar firms on the FCC's "Covered List" of national security threats from providing telecom services without a full, case-by-case review.

The measures represent a significant expansion of the FCC's national security powers, threatening to revoke existing licenses and disrupt supply chains for U.S. firms. The proposals now enter a period of public comment before the commission can take final action.

FCC Expands ‘Covered List’ Crackdown

The FCC’s initiative seeks to close what it calls a regulatory gap, where companies flagged as security risks could gain automatic authorization to operate in the U.S. telecom market. Under Section 214 of the Communications Act, many carriers have historically used a "blanket" authority to begin providing services without a comprehensive FCC review.

The new proposal would eliminate this streamlined process for companies on the agency's "Covered List." This list already includes major Chinese technology and telecom firms such as Huawei, ZTE, Hikvision, and Dahua.

In a related 3-0 vote, the commission also moved to prohibit Chinese state-owned carriers China Mobile, China Telecom, and China Unicom from operating data centers in the United States. The agency is also seeking public comment on whether to revoke existing authorizations for these firms and if U.S. carriers should be barred from interconnecting their networks with providers on the Covered List.

Beijing Fires Back at ‘Discriminatory’ Measures

China’s Ministry of Commerce swiftly condemned the moves, accusing the FCC of abandoning the principle of technical neutrality and generalizing the concept of national security without any factual basis.

"The U.S. Federal Communications Commission has repeatedly enacted restrictive measures that discriminate against foreign companies and products, including those from China," a ministry spokesperson said. "This seriously harms the interests of China and other relevant trade partners."

The proposed regulations are likely to negatively impact Chinese telecommunication and tech hardware companies by severely restricting their access to the U.S. market. The move could also increase compliance costs and disrupt supply chains for American companies that rely on Chinese components and testing services, heightening market uncertainty amid ongoing U.S.-China trade friction.

This article is for informational purposes only and does not constitute investment advice.