US FCC Chairman: Huawei and ZTE designated as companies posing national security threat to US

Ajit Varadaraj Pai, Chairman of the US Federal Communications Commission (FCC), announced on Tuesday that they have designated Huawei and ZTE as companies posing a national security threat to the United States. 

With this declaration, US firms are effectively barred from using the $8.3 billion government fund to purchase equipment from these two Chinese telecom companies.

"We cannot and will not allow the Chinese Communist Party to exploit network vulnerabilities and compromise our critical communications infrastructure," Pai said in a statement, as reported by Reuters.

Market reaction

Wall Street's main indexes retreated from session highs following this development. As of writing, the S&P 500 was still up 0.65% on the day at 3,073 points and the Dow Jones Industrial Average was losing 0.1%.