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Huawei: US Admits It’s All About The Trade Talks

Huawei: US Admits It's All About The Trade Talks

Europe has always been the primary battleground in the conflict between Huawei and Washington, and over the weekend a cellular industry group put the 5G cost for the EU of excluding equipment from Huawei and Chinese stablemate ZTE at more than $60 billion, and a delay of up to 18 months.

The GSMA report noted that with Huawei and ZTE accounting for around 40% of EU cellular equipment, non-Chinese alteratives including Ericsson, Nokia and Samsung could not pick up the slack with their existing commitments in the U.S. and Asia. As a result, “a ban on Chinese vendors would severely lessen competition in the mobile equipment market, increasing prices and driving additional 5G rollout costs.”

U.S. networks are largely Huawei-free, and so the industry report also concluded that a prohibition on Chinese network kit would disadvantage Europe: “The need to replace network equipment and the capacity constraints on the remaining mobile equipment vendors would disrupt current rollout plans. Such a delay would widen the gap in 5G penetration between the EU and the U.S. by more than 15 percentage points by 2025.”

Ironically, on June 4 the White House’s acting budget chief Russell Vought reportedly wrote to U.S. Vice President Mike Pence asking for a delay in elements of the 2019 National Defense Authorization Act that ban Huawei’s use across the federal government. The issue reportedly being that the number of companies able to supply the U.S. government would reduce as supply chains are stripped down and reassembled.

The letter said that “while the Administration recognizes the importance of these prohibitions to national security, a number of agencies have heard significant concerns from a wide range of potentially impacted stakeholders who would be affected.” Given Huawei equipment is deployed in rural areas rather than with major carriers, the letter also pointed out that “rural Federal grants recipients may be disproportionately impacted by the prohibition.

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