As Britain bans Huawei, U.S. pressure mounts on Europe to follow suit


By Luke Baker and John Chalmers

LONDON/BRUSSELS, July 14 (Reuters) - Britain's decision to ban China's Huawei from its 5G network increases further pressure on EU countries to impose stricter limits on the world's largest telecoms equipment maker just as the company expands its footprint across Europe.

Prime Minister Boris Johnson announced the Huawei ban on Tuesday, frustrating Beijing but pleasing Washington, which had pushed Britain to reverse a January decision to grant Huawei a limited role in its 5G rollout.

The about-face follows anger in London at China's crackdown on Hong Kong and the view that Beijing has not told the full truth over coronavirus. It also reflects the impact of new U.S. sanctions on chip technology, which London says affects Huawei's ability to remain a reliable supplier.

Europe now finds itself front and centre of the U.S. drive to uproot Huawei from next-generation mobile networks.

Robert O'Brien, the U.S. national security adviser, arrived in Paris on Monday for three days of talks with his counterparts from France, Germany, Italy and Britain. Washington has made clear that 5G networks are on the agenda.


In January, the European Union published a "toolbox" of recommendations for its 27 member states, saying they could either "restrict or exclude" so-called high-risk 5G vendors, such as Huawei, from core parts of their telecoms network.

The recommendations fell short of the ban sought by the United States; in several EU countries Huawei remains closely involved in both existing 4G networks and the planned rollout of 5G, including in Sweden, Spain, Austria and Hungary.

The head of France's cybersecurity authority has ruled out a total ban on Huawei, and Germany's Deutsche Telekom, Huawei's largest customer in Europe, has argued firmly against any blanket ban on individual vendors.

But since the European Commission published its toolbox there have been significant geopolitical developments, including the spread of COVID from China, hardnosed diplomacy by Beijing that has angered some EU governments, the imposition of China's new security law in Hong Kong and the U.S. chip-tech sanctions.

A senior EU diplomat said some countries were now worried the Commission guidelines did not go far enough to limit dependence on Huawei, and the distinction between 'core', meaning critical parts of 5G networks that Huawei should be excluded from, and 'non-core' was "not as robust as we thought".

"EU member states do seem to be increasingly doubtful about Huawei," the official said. "The standard view is heading towards giving maybe just a very small role to Huawei [for 5G]."

A lot is likely to depend on the view Germany takes. If Berlin decides to give the go-ahead for Huawei to play a significant role in its 5G network, even if only in 'non-core' areas, it would provide cover for smaller, less influential countries to adopt a similar approach.

The German government is not expected to make a decision on its 5G rules until September. While Deutsche Telekom backs Huawei, Germany's head of foreign intelligence has said the Chinese firm cannot be trusted and should not play a major role.

Chancellor Angela Merkel has long advocated "change through trade", arguing that China can become a more trusted partner through engagement. But she is finding it harder to make that case as China takes a steadily tougher line on Hong Kong and broader geopolitics across Asia and the Middle East.

China did not immediately respond to Britain's decision on Huawei, or send any wider signals to the European Union, but the company itself said it was "bad news" and would be damaging to British mobile customers.

"It threatens to move Britain into the digital slow lane," a spokesman for Huawei UK said. "We remain confident that the new U.S. restrictions would not have affected the resilience or security of the products we supply to the UK."

(Additional reporting by Andreas Rinke in Berlin and Guy Faulconbridge in London Editing by Peter Graff)

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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