Yes, Trump Just Seriously Damaged Huawei—But This Isn’t Over Yet – Forbes


We now have confirmation, if any was needed, that the U.K.’s decision to ban Huawei from its 5G network came as a direct result of pressure from U.S. President Trump and his security team. There was also the non-trivial issue of an about-turn in the advice from Britain’s spooks to its politicians—the risks with Huawei equipment could no longer be mitigated. This, again, was directly attributable to America’s campaign against the Chinese tech giant. On the surface, this may look like a victory for Washington, but it’s not that simple—Huawei is far from defeated.

The clear implication in the U.K. is that the Huawei decision is all about politics and has little to do with security. The U.K. cyber team charged with defending the realm from the threats associated with Chinese equipment have only changed their view because, at America’s insistence, U.S. components inside Huawei equipment are being replaced by (likely) Chinese equivalents. A change in the political winds—there’s a U.S. election now just a few months away—and both the lobbying and the supply chain restrictions could easily fall away.

This context behind the U.K.’s “materially” changed security report, that the change was fabricated by the U.S., is critical. Absent the latest sanctions, the U.K. advice would not have changed and the reason driving the U.K.’s reversal would not exist. The confirmation from leading chip supplier TSMC, that it will cease supplying Huawei in September per new U.S. rules, was also steeped in the implication that were those rules to soften or change, or were the company to successfully apply for a license to supply, than we’d be quickly back to normal.

Even the structure of the U.K.’s newly announced reversal is all about the detail. The decision to bar purchases of 5G equipment from next January leaves a sizeable procurement window wide open, and is designed to restrict the acquisition of standalone 5G kit rather than LTE-to-5G upgrades. The long grace period (until 2027) before a rip and replace is mandatory, and the silence on existing 3G and 4G equipment already deployed, have left many options on the table. If a week is a long time in politics, seven years is a lifetime.

Trump was quick to take credit for the U.K. decision, personalizing the victory, and it’s true that the president has campaigned long and hard to persuade his key defense and intelligence ally to toe the U.S. line. But Washington’s relationship with Beijing is starkly different to London’s. The U.S. can brush aside economic threats from China—neither can live without the other. A U.K. facing up to the harsh realities of a post-COVID Brexit is not in such a fortunate position. China issued further threats of “retaliation” in the wake of the Huawei decision. And that carries some weight in a country reliant on Chinese investments in infrastructure and technology, and with a huge install base of Huawei equipment.

Huawei’s U.K. PR chief, Ed Brewster, stressed during a charged BBC Newsnight interview last week, that the company’s mission in the U.K. continues. R&D investments and the decision, announced post the 5G reversal, to open new flagship stores should tell you all you need to know about where Huawei stands on its U.K. future. “We know that millions of people here in the U.K. love our products,” the company said on announcing the £10 million ($12.5 million) investment. Hawkish U.S. politicians come and go, this Chinese giant is playing a much longer game.

The group of U.K. politicians that has lobbied its government hard for tougher sanctions on Huawei knows there is a risk of further changes as this story runs through November’s U.S. election and whatever fallout we see from inquiries into the origins of coronavirus and Beijing’s alleged misinformation. There is also a much wider technology stand-off, one that has now dragged the TikTok into the mix.

The U.S. is fast approaching a decision point as to just how far it wants to take this, before the implications on its own technology sector become much harder to sell back home. The headlines might be filled these days with news of new investments into India, but China is China, and it’s not going to be easily displaced as the world’s centre of tech manufacturing and the world’s hottest consumer market.

Stepping back from this seminal week in the battle between the U.S. and Huawei, it’s hard not to think that the U.K. has left the door ajar for further twists and turns. The decision is solely based on U.S. lobbying and sanctions, and the U.K. does not want to be left holding the check should the U.S. change its tone.

Source: forbes.com

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