Trump trade war threatens critical undersea datalink between Los Angeles and Hong Kong: report
Trump said he was ready for a "historic" deal with China as the leaders kicked off their meeting and Xi told him "dialogue" was better than confrontation AFP / Brendan Smialowski

In an unprecedented development with far-reaching consequences for the internet, global commerce, and national security policy, the Wall Street Journal reported on Wednesday that U.S. officials at the Justice Department are seeking to block the Pacific Light Cable Network, an 8,000-mile undersea data link between Los Angeles and Hong Kong.

Officials are citing national security issues with the Dr. Peng Telecom & Media Group Co., the Chinese-based investor helping U.S. tech companies finance the project.

This marks the first time that U.S. regulators have opposed such a project for national security reasons — and potentially signals a shift in America's global internet policy.

The Pacific Light Cable Network, estimated to cost $300 million, is already under construction, with ships laying thousands of miles under a temporary permit that will expire in September. But Team Telecom, the regulatory body that oversees the project, is likely to reject its license.

Investors in the project, including Google and Facebook, planned to use it to boost internet speeds on both sides of the Pacific.

While the U.S. and China have long collaborated on telecommunications projects, distrust is growing between the two nations, as China encroaches on U.S. military power and President Donald Trump slaps the country with gigantic tariffs.

U.S. officials have also recently been fighting to limit the Chinese telecommunications firm Huawei from participation in the new 5G wireless system, with the Senate pressuring Google to sever ties with the company.