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U.S. Sen. Marsha Blackburn speaks to media following a Chattanooga Rotary Club luncheon at the Chattanooga Convention Center on Thursday, April 25, 2019, in Chattanooga, Tenn. Sen. Blackburn said during a speech that Tennesseeans are ready to move on from the Mueller investigation.

This story was updated Tuesday, Aug. 6, 2019, at 9:15 p.m. with more informatio

U.S. Sen. Marsha Blackburn, R-Tennessee, Tuesday accused the Chinese telecommunications maker Huawei Technologies Co. of trying to spy on U.S. companies by embedding spyware in its equipment.

In an interview on CNBC's Squawk Box today, Blackburn said Huawei embeds spyware into global networks "and this is why we are concerned about working with them."

"I think we need to be tough on China when it comes to intellectual property and forced technology transfer, and we need to be very tough on them about Huawei because that is what will underpin their spy network and we cannot allow them to get a foothold in these networks," Blackburn said.

In a television interview from Nashville, Blackburn said artists, music producers and technicians nearby in Music City are among those whose intellectual property is in danger.

"These chips are so small you cannot detect them until they begin to transmit to an outside receptor," she said. "At that point, they are into your network and they are spying on you and they are manipulating the data within your networks."

Although Huawei has denied it uses spyware in its equipment, Blackburn said Huawei is part of the military industrial complex in China working to spy on other countries. The Tennessee senator, a member of the Senate subcommittee on Communications, Technology, Innovation, and the Internet, said last month it would be dangerous to allow Huawei access to U.S. fifth generation (5G) wireless networks.

"The issue is that Huawei is a state-owned company and China is looking to push one-way technology around the globe," she said on CNBC. "Why do they want to do this? Because they want to spy. How are they doing it? They are embedding spyware into their hardware. I believe this is something that they are looking to stand up for their cyber warfare with and we have to be very careful how we deal with Huawei."

Huawei, the world's biggest producer of telecom equipment, was added to the Commerce Department's "entity list" in May due to national security concerns. U.S. companies are banned from doing business with companies included on that list.

But a month go, President Trump announced at the Group of 20 summit in Japan that he would allow U.S. companies to sell equipment to Huawei. Trump added that "we're talking about equipment where there's no great national security problem with it."

Trump has frequently complained about China violating intellectual property rules and trying to steal American technology, leading the administration to impose a series of increased import duties on Chinese imports.

Blackburn praised Trump for his approach to China even if it may mean some short term loss of business for some companies. She said China has violated intellectual property rules by the World Trade Organization and she said, "I am pleased that the president is addressing" China trade with the imposition of import duties.

Blackburn said in meeting with 50 or so business leaders in Tennessee this week they told her that the economy remains strong.

"Main street and small businesses are doing well," Blackburn said, claiming that Trump enjoys the support of most businesses and farmers in his trade dispute with China.

"They are saying if President Trump needs to move forward with this to get China to the point that they are a trustworthy partner and we know that they are not going to be lying, cheating and stealing, then so be it," she said.

China is Tennessee's third largest trade partner with 18 Chinese companies located in Tennessee, including Yanfeng US Automotive Interior Systems in Chattanooga and Rising Dragon Group in Cleveland, Tennessee.

China, which bought $5.6 billion of U.S. farm product exports in 2018, has been a purchaser of Tennessee soybeans, pork and other agricultural products.

But China said this week it would quit buying American farm products in response to Trump's announcement last week of a new 10% tariff on another $300 billion worth of Chinese imports, effective Sept. 1.

Despite the drop in stocks on Wall Street in response to the escalating trade war, Blackburn said, "I think the economy at the local level is healthy and robust."

To help boost trade, Blackburn urged House Democrats to approve the U.S.-Mexico-Canada Agreement (US MCA), which the three nations negotiated to update the North American Free Trade Agreement.

"There is a way we can get some relief and that is to put the USMCA on the floor (for a vote by the U.S. House of Representatives)," said Blackburn, who served for 16 years in the House before being elected to the U.S. Senate last November. "(House Speaker) Nancy Pelosi needs to schedule a vote.Pass that and show that we can make a decision and we can stand with agreement and then move."

Contact Dave Flessner at dflessner@timesfreepress.com or at 757-6340.

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