The US ‘entity’ list is growing and the damage is spreading

The entity list dreamt up by the Trump administration is getting longer and blacker and the ripples are expanding beyond Huawei and ZTE. The list of telecoms companies in the US which are using technology from Huawei, ZTE and others stretches to 50 or more and the cost of ripping out the targeted Chinese technology is believed to be about $1.8 billion.

This cost will be met, more or less, by the US Government which is fine. Except it is not when you factor in the hassle, resources, time and unexpected costs. The bill will end up being much more.

And, as Telecom TV points out, many on the list are small, rural companies that probably come under the ‘Mom and Pop’ category of US businesses. Such great names on the list include Hiawatha Communications, Mark Twain Rural Telephone Company and the Panhandle Telephone Cooperative. It is not rocket science to guess that this strategy to ‘secure the nation’s networks’ will be very damaging indeed.

And the whole exercise will set timetables and strategies back by – who knows – but a significant amount of time.

Whatever your opinion about Huawei, ZTE and others on the entity list (and while we are sitting firmly on the fence, our legs are dangling on the Huawei side) the ripples caused by the charade that is Mr Trump’s trade war are widening by the day.

While the effect on the US will be massive irritation and inconvenience, the impact on Chinese companies is becoming more obvious and less fair as each story unfolds.

Companies such as SMIC will suffer hugely, possibly terminally. And it seems to come down to chips.

What is not widely known is that these chip companies “are predominantly from Japan, The USA and The Netherlands but because it’s a linear process, no one can make a silicon chip without using a piece of equipment or software from a USA company.

Which gives Mr Trump the upper hand – until China can respond by building better chips itself.

This whole sorry episode, epitomised by the dreaded entity list, leaves you sitting with your head in your hands, mumbling ‘children, children…’ and longing for the return of saner times.

Quite what will happen when (if) Joe Biden gets into the White House is anyone’s guess but let us hope that this insane nightmare ends soon.