Why the FCC put a tighter squeeze on the world's largest smartwatch company

The Federal Communications Commission (FCC) voted today to tighten restrictions placed against telecom equipment imported into the U.S. by certain Chinese manufacturers considered to be national security threats. The companies, Huawei, ZTE, and China Telecom, had previously been placed on the U.S. “Covered List.” As a result, the regulatory agency has not been allowed to authorize the import or sale of new telecommunications gear from these firms.

The FCC is concerned about loopholes that can be exploited by Chinese firms on the covered list

But the agency has been concerned about loopholes that could be used to ship equipment into the United States. FCC Chairman Brendan Carr explained that the FCC is looking for “These present loopholes that bad actors could use to threaten the security of our networks. America’s foreign adversaries are constantly looking for ways to exploit any vulnerabilities in our system.” Looking to plug any gaps, the FCC voted 3-0 to prohibit the agency from authorizing the import of devices containing component parts made by the companies on the list.

The innovative Huawei Watch D2 monitors the user’s blood pressure. | Image credit-Huawei

The FCC’s Carr said earlier this month that thanks to a crackdown by the regulatory agency, major online retailers in the U.S. removed several million listings for electronic devices and products from China that were not supposed to be sold in the United States. These devices and products were on the U.S. list of equipment banned from sale in the U.S. or were not authorized for sale in the U.S.

Among the products that the FCC is focusing on are smartwatches from Huawei

These products included smartwatches and home security cameras from Chinese companies including Huawei, Hangzhou Hikvision, ZTE, and Dahua Technology Company. With 21% of global market share during Q2 2025, Huawei was the number one smartwatch manufacturer worldwide in that quarter. Apple was second as the Apple Watch enjoyed a global market share of 17% during this year’s second quarter.

The FCC reminded companies earlier this month via a national security notice about the products that were banned including video surveillance gear. Additionally, on October 15th, the FCC started the process of pulling the authority of Hong Kong telecom firm HKT to operate in the U.S. due to national security concerns. The latter is a subsidiary of Hong Kong’s PCCW.

Earlier this year, the FCC said that nine Chinese companies already on the Covered List were being looked at closely. Those firms included:

Huawei
ZTE
Hytera Communications
Dahua Technology Company
Pacifica Networks/ComNet
China Unicom

Back in March, FCC Chair Carr said that the U.S. operations of Huawei, ZTE, and China Mobile were being scrutinized because these firms were not adhering to sanctions placed on them by the U.S. At the time, Carr said that the FCC needed to investigate what these companies are doing and “move quickly to close any loopholes that have permitted untrustworthy, foreign adversary-backed actors to skirt our rules.”

President Trump’s intervention saves ZTE from possible financial ruin

Back in 2012, a draft report from the U.S. House of Representatives’ Intelligence Committee called Huawei and ZTE threats to U.S. national security. The report suggested that Huawei and ZTE products be banned in the U.S. because of the influence of the CCP on those companies. In 2013, ZTE was the fourth largest smartphone vendor in the U.S. and in 2014 it was the second largest smartphone supplier in the U.S. pre-paid smartphone market. ZTE was successful in the U.S. because it provided low-priced handsets to major U.S. carriers like AT&T, Verizon, and T-Mobile.

A deal was agreed to in July 2018. ZTE paid an additional $1 billion penalty, placed $400 million in an escrow account to cover any future violations, replaced its entire board of directors and executive leadership. Lastly, a U.S. appointed compliance monitor was embedded inside ZTE for10 years.