Cracks Appearing in Trump's Huawei Boycott

By Paul Budde
Paul Budde

It must have been a galling experience for President Trump when his good mate British Prime Minister Boris Johnson failed to step in line with Trump's demand that the UK should also boycott the Chinese firm Huawei by not allowing them to be involved in the rollout of 5G in Britain. However, the involvement of Huawei will be limited.

It further proves that boycotting Huawei is a political and not a technical issue. Huawei is a poster child for China's international technology success and, by boycotting Huawei, Trump is hurting China as a global technology leader.

While there are other good telecoms manufacturers, Huawei is internationally recognized for being the leader in 5G technology, innovation and R&D, at the same time, it has been able to offer their products and services at a significantly lower cost than its competitors. Britain recognizes, as do many other countries in Europe and Asia that this provides them with the best possible mobile technology, which will assist these countries in global competitiveness and provides lower prices to its citizens.

To highlight this situation, the restriction put on Huawei in the rollout of 5G in the UK is going to cost British Telecom £500 million, as it will have to buy more expensive gear from other suppliers. BT's shares, already down 25% over the previous 12 months, were down a further 7.5% after the company's assessment of the Huawei impact.

I totally agree we need to be very wary of the totalitarian regime in China, where President Xi Jinping is using technology in an Orwellian way to control and manipulate its population, with the aim of making them placid and complacent. And he would like to extend his surveillance state model beyond the Chinese borders.

However, these sorts of concerns should be addressed through international forums putting pressure on China to adhere to global values and agreements. In these international forums, the rest of the world shouldn't shy away from strong pressure and strong condemnation.

As mentioned, the UK is not giving Huawei a free ride — there is a range of restrictions on the company's participation in the 5G rollout. Also, Boris Johnson voiced its support for more local R&D support in order to stimulate more competition into the telecoms equipment market. There are basically three major global telecoms manufacturers, apart from Huawei, Ericsson and Nokia (the latter two both European companies).

Back to the politics of the issue, in my opinion, Trump tries to mix these real concerns with global hegemony issues and the fear of the United States losing out economically to China.

It will be interesting to see if there will be any fallout of Johnson's decision not to follow Trump's lead. Unlike other countries in Europe and Asia who are still buying Huawei equipment, Britain is part of the Five Eyes countries. These Anglo-Saxon countries (Australia, Canada, New Zealand, the United Kingdom and the U.S.) share intelligence, and Trump has already mentioned his concerns about any of these countries not complying with the U.S. policy on Huawei.

With Britain leaving the EU, this country is now desperately looking for new bilateral trade deals, and Trump could make life difficult for Johnson by dragging out negotiations and/or being stubborn about making deals.

By the same token, an unpredictable President Trump could suddenly end the Huawei boycott if he believes he may get good concessions out of President Xi Jinping.

Another interesting development to follow is the reaction of other countries in the process of making decisions about the rollout of their 5G network. Will they follow UK's lead and withstand the Trump threats? Through the so-called Nine Eyes and Fourteen Eyes alliances, many more countries are linked to intelligence sharing arrangements with the United States. Apart from Australia and Japan, none of them have followed the U.S. lead.

It is expected that New Zealand and Canada are now expected to follow the UK's lead. The EU, as a group, has already indicated it is not in favor of banning any company from the 5G rollouts. Instead, they are working on a stringent security framework for these networks that will be imposed on all players. German Chancellor Angela Merkel has also voiced her opposition to a Huawei ban, and the UK decision will no doubt also further strengthen her stand on the issue.

At the same time, countries in Africa and Asia are continuing to roll out networks with Huawei's 5G equipment, and here the UK decision will have a positive effect on further decisions to be made on these continents.

In short, this story is far from over, and there will be many more twists and turns before we will see the end of this. In the meantime, the real focus should be on global corporations aimed at ensuring that our democratic and human rights values are well protected in the wake of all the new technologies — not just in relation to 5G, but also and in particular AI.

By Paul Budde, Managing Director of Paul Budde Communication. Paul is also a contributor of the Paul Budde Communication blog located here.

Related topics: Mobile Internet, Policy & Regulation, Telecom, Wireless

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