logo
US aims to ban Chinese technology in undersea telecommunications cables

US aims to ban Chinese technology in undersea telecommunications cables

Reuters16-07-2025
WASHINGTON, July 16 (Reuters) - The Federal Communications Commission said on Wednesday it plans to adopt rules to bar companies from connecting undersea submarine communication cables to the United States that include Chinese technology or equipment.
"We have seen submarine cable infrastructure threatened in recent years by foreign adversaries, like China," FCC Chair Brendan Carr said in a statement. "We are therefore taking action here to guard our submarine cables against foreign adversary ownership, and access as well as cyber and physical threats."
The United States has for years expressed concerns about China's role in handling network traffic and the potential for espionage. The U.S. has broad data security concerns about the network of more than 400 subsea cables that handle 99% of international internet traffic.
Since 2020, U.S. regulators have been instrumental in the cancellation of four cables whose backers had wanted to link the United States with Hong Kong.
The FCC last year said it was considering new rules governing undersea internet cables in the face of growing security concerns, as part of a review of regulations on the links that handle nearly all the world's online traffic. The FCC said it was considering barring the use of equipment or services in those undersea cable facilities from companies on an FCC list of companies deemed to pose threats to U.S, national security, including Huawei, ZTE (000063.SZ), opens new tab, (601728.SS), opens new tab China Telecom and China Mobile (600941.SS), opens new tab.
Carr said the FCC is taking action to "guard our submarine cables against foreign adversary ownership, and access as well as cyber and physical threats."
The FCC will also seek comment on additional measures to protect submarine cable security against foreign adversary equipment.
The cutting of two fiber-optic undersea telecommunication cables in the Baltic Sea prompted investigations of possible sabotage.
In 2023 Taiwan accused two Chinese vessels of cutting the only two cables that support internet access on the Matsu Islands and Houthi attacks in the Red Sea may have been responsible for the cutting of three cables providing internet service to Europe and Asia.
Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

Dollar shedding its tariff risk premium
Dollar shedding its tariff risk premium

Reuters

time13 minutes ago

  • Reuters

Dollar shedding its tariff risk premium

LONDON, July 29 (Reuters) - The dollar's surge since the U.S.-European Union trade deal seems a little counterintuitive at first glance, but the rally suggests the greenback may be shedding its elevated trade risk premium - whether Washington wants that or not. The weekend's U.S.-EU agreement averted a likely protracted trade war by halving threatened U.S. import tariffs on European goods in return for market access and investment commitments. It mirrored a similar deal made with Japan last week, though it covers four times as much U.S. trade. But, curiously, news of the Japan deal last Tuesday pushed the yen higher, initially at least. There was no such boon for the euro on Monday - as it tumbled over 1% through the day against a resurgent dollar. Some people pointed to disquiet within Europe about whether the bloc rolled over too easily, only to end up with tariffs some 14 percentage points higher than they were at the start of the year anyway. Others focused on the impact of likely exaggerated European investment and spending pledges. But something else seemed to be stirring in a broader worldwide dollar rally that went way beyond the euro, a possible unwinding of the risk premium that had been built into the currency since April to account for Washington's seemingly chaotic tariff swipes and possible reactions. With EU, Japan and UK deals in the bag and intense talks under way with China, Canada and Mexico, Washington has essentially defused tensions surrounding the looming August 1 trade deal deadline. And the agreements completed now cover a combined 60% of all U.S. trade. The China standoff will likely rumble on but negotiations are under way in Stockholm and standing pacts will likely be extended, with Beijing's hand weakened by trade deals elsewhere. What's more, the Trump administration appears to have successfully managed all this with a minimum of retaliation and limited economic damage to date. The effective U.S. tariff rate is set to end somewhere between 15% and 20%. That may be a possible drag on growth at home and abroad, but tariff income is flattering U.S. government revenues at a relatively low cost. Any U.S. consumer inflation fallout coming down the pike will keep the Federal Reserve cautious for longer about interest rate cuts - but that too may be a lift for the dollar if it's more responsive to the rates picture again. "In terms of domestic political dynamics, Donald Trump is winning the trade war," AXA Group Chief Economist Gilles Moec wrote on Monday. Assuming this is the beginning of the end of the year's big tariff shock, businesses and markets may finally have some degree of certainty about the months ahead and allow a lot of paused planning and activity to resume - even if at measurably higher costs. Fading recession risks further on that, the dollar should again start to revert to more normal behavior tracking relative interest rates and economic signals rather than Truth Social posts. Uncertainty is always hard to quantify, but there are a few ways investors have been capturing it. A closely followed trade component of the Economic Policy Uncertainty Index series - the Baker-Bloom-Davis model - skyrocketed to unprecedented levels in April. But it has since subsided to its lowest point since January and is less than a quarter of April's peak. U.S. stocks have clearly bounced back from the April shock, hitting record highs once again, as recession signs have failed to appear and the artificial intelligence theme has charged forward. Treasury yields, however, do remain elevated by the debt-raising fiscal bill and stubborn Fed stance. But volatility gauges for both equities (.VIX), opens new tab and Treasuries (.MOVE), opens new tab are back near their respective lows for the year. And the dollar, the one clear loser all year, is clawing back ground. Crucially, its recent separation from transatlantic yield trends is slowly being re-established. After April 2, the 2-year yield gap boomed about 40 basis points wider in favor of U.S. Treasuries and remains more than 20 bp wider since that day. But rather than follow that gap in lockstep as usual, the dollar went the other way and lost over 6% - a critical reflection of a building risk premium amid foreign investor concern, hedging and capital switching. Selling has petered out in recent weeks, and Monday's 1% dollar index surge was another indication of a more positive bias that could persist with the big yield premium so large. Whether a recovering dollar is what Trump actually wants is a different question. The running assumption all year has been that Trump favored a weaker dollar as a way of narrowing U.S. deficits and boosting exports, and Trump addressed the issue on Friday. "It doesn't sound good, but you make a hell of a lot more money with a weaker dollar - not a weak dollar but a weaker dollar - than you do with a strong dollar," he said. If the dollar now shows signs of bouncing back sharply, political pressure on the Fed to counter it with much lower interest rates will remain intense. The opinions expressed here are those of the author, a columnist for Reuters -- Enjoying this column? Check out Reuters Open Interest (ROI), your essential new source for global financial commentary. Follow ROI on LinkedIn. Plus, sign up for my weekday newsletter, Morning Bid U.S.

Breakingviews - Samsung's $16.5 bln Tesla coup comes with caveats
Breakingviews - Samsung's $16.5 bln Tesla coup comes with caveats

Reuters

time39 minutes ago

  • Reuters

Breakingviews - Samsung's $16.5 bln Tesla coup comes with caveats

HONG KONG, July 29 (Reuters Breakingviews) - Samsung Electronics ( opens new tab finally has some good news. In posts on his X social media platform on Sunday, Tesla (TSLA.O), opens new tab CEO Elon Musk detailed, opens new tab that his carmaker has struck a $16.5 billion deal to buy state-of-the-art chips from the South Korean group. Yet the impressive coup, which pushed Samsung's stock up 7% on Monday, comes with some caveats. First, on an annual basis, it works out to $2.1 billion in sales over the agreement's eight-year span. That's nowhere near enough to turn things around at Samsung's foundry business. Its operating loss topped 5 trillion won ($3.6 billion) in the first quarter and widened in the second quarter, estimates Fitch Ratings' Shelley Zhang. Granted, Musk also said that the contract, which includes advanced A16 chips, "is just the bare minimum" and demand could end up being "several times higher". But Musk is notorious for over-egging production estimates. Even if he's right, Tesla's patronage is unlikely to be enough to turn around Samsung's foundry fortunes alone. That'll require Chair Jay Y. Lee finding ways to parlay Musk's leap of faith into a broader contract chip-manufacturing business able to snatch share from the $1 trillion market leader TSMC ( opens new tab. That may not be straightforward. An unusual decision to allow Musk to walk production lines and work with Samsung to 'maximize manufacturing efficiency' could force the company to share crucial know-how. That might put off other potential customers. Tesla is a risky partner in other ways, too. Last week, Musk said that the company faces a 'few rough quarters' given waning U.S. support for battery power. The electric-vehicle maker is also losing share in China and Europe. Long-term bets, including robotaxis and the Optimus robot, are not necessarily going to fill the gap. Meanwhile, Samsung is under pressure to show it can execute. Its high bandwidth memory chips failed tests set by another key customer, Nvidia (NVDA.O), opens new tab, due to heat and power consumption problems, Reuters reported last year. Although it has been able to develop cutting-edge chips like the 2-nanometre device Musk needs, ensuring high yield and quality at scale is tough. Making the chips at an untested U.S. plant adds further uncertainty. Falling short would jeopardise the project's profitability, as well as whether or not Tesla sticks with them. Lee will welcome Tesla on board, but he'd be wise to buckle up for the ride. Follow @KatrinaHamlin, opens new tab on X

AstraZeneca beats second-quarter profit expectations, maintains outlook
AstraZeneca beats second-quarter profit expectations, maintains outlook

Reuters

time43 minutes ago

  • Reuters

AstraZeneca beats second-quarter profit expectations, maintains outlook

July 29 (Reuters) - AstraZeneca (AZN.L), opens new tab beat second-quarter earnings expectations on Tuesday, helped by strong sales of key cancer, heart and kidney disease drugs, but maintained its full-year forecast as pricing pressures and global trade risks remain challenges. The company hopes to move on from scandals in China, after indicating that any impact from probes in its second-biggest market would be minor, and focus on growing its U.S. footprint and drug pipeline to reach $80 billion in annual revenue by 2030. AstraZeneca said last week it plans to spend $50 billion to expand manufacturing and research capabilities in the United States by 2030, the latest drugmaker to ramp up investments in the country in response to President Donald Trump's tariff threat. The Anglo-Swedish drugmaker is counting on a wave of expected launches of 20 new medicines and its U.S. expansion to reach its $80 billion annual revenue target by the end of this decade. AstraZeneca, the UK's largest listed company by market value, reported revenue growth of 11% to $14.46 billion for the three-month period ended June at constant currency rates, with core earnings of $2.17 per share. "Our strong momentum in revenue growth continued through the first half of the year and the delivery from our broad and diverse pipeline has been excellent," CEO Pascal Soriot said in a statement. Analysts were expecting $14.15 billion in revenue and $2.16 in earnings per share for the second quarter, according to a company-provided consensus.

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into a world of global content with local flavor? Download Daily8 app today from your preferred app store and start exploring.
app-storeplay-store