U.S. Uses Security To Force Tech Companies Back Home

The Federal Communications Commission has ordered a ban on the import of new consumer routers that are manufactured overseas, citing cybersecurity risks. The order blocks every new router model made outside the United States from receiving FCC equipment authorization, which means new devices cannot be imported or sold.

The problem is no major consumer router brand currently manufactures in the United States at any meaningful scale. China commands around 60% of the market for consumer routers, but American brands also manufacture abroad. Netgear, Amazon Eero, and Google Nest Wifi all manufacture their products in Asia, much of it in Taiwan.

The policy mechanics clarify the stakes. The FCC updated its Covered List to include “Routers produced in a foreign country, except routers which have been granted a Conditional Approval by DoW or DHS.” Previously-authorized routers may continue to be imported, sold, and used, but the pipeline for new models closes unless manufacturers get exemptions.

Getting those exemptions requires reorganizing global supply chains. A conditional approval application must include ownership and supply chain information, plus a “detailed, time-bound plan to establish or expand manufacturing in the United States”. Conditional approvals will be granted for up to 18 months.

The FCC points to real vulnerabilities. Salt Typhoon, a China-backed espionage group, has hacked into dozens of phone and internet companies across the world, including in the United States, and has been known to exploit vulnerabilities in routers made by American networking giant Cisco. Flax Typhoon, another hacking group backed by China, targeted both US-made and foreign-made routers to hack at least 126,000 devices in the United States.

But the security case has a gap. The FCC did not provide evidence to show that US-made consumer routers are more secure than routers developed overseas. Security researcher Brian Krebs noted that “almost without exception, the hardware and software that ships with most consumer-grade routers includes a number of default settings that need to be changed before the devices can be safely connected to the Internet” regardless of manufacturing location.

The near-term market impact is supply freeze. Dell’Oro Group and Wi-Fi Now analysts said new router models will be slow to hit the US market while manufacturers seek conditional approval. As current authorized inventory depletes and new models cannot enter the market without Conditional Approval, supply constraints could push prices higher.

The broader pattern is industrial policy disguised as security policy. A rule that bans new foreign router models while leaving millions of existing foreign-made devices completely untouched does not make US networks measurably more secure today. What it does do is create strong pressure to move manufacturing to the United States, which is an industrial policy goal.

This follows the December drone ban using identical legal architecture, and precedes what’s likely a wave of similar restrictions on other consumer electronics categories.