Disaster for Brexit? US issues stark threat that could torpedo trade deal with Britain

This article was originally published on this site

There are concerns the telecommunications giant could share information with the Chinese government. This has sparked fierce debate on whether Huawei should be allowed to bid to provide equipment for the UK’s 5G network and the company had been hit with sanctions that prevents any trade with US firms. Founder and CEO Ren Zhengfei is a member of the ruling Chinese Communist Party and served in the People’s Liberation Army but has insisted he will “never do anything to harm any other nation”.

A civil servant has told The Telegraph Britain may have to back these hardline American policies as refusal could be seen as “undermining Washington’s efforts to reinvigorate the World Trade Organisation (WTO).”

Reports from initial trade talks show the telecoms industry feels US concerns over Huawei are more to do with international than national security.

Mr Trump is locked in a trade war with China which has seen him impose stiff trade tariffs on goods from the country.

Whitehall is reviewing Huawei involvement in the UK’s 5G network in a report led by the Department of Digital, Culture, Media and Sport (DCMS).

READ MORE: Boris Johnson: ‘I’ll get that deal done and unite the country’

The Sunday Telegraph were told by a senior official it is difficult to juggle the need for a better mobile network with the need for a free trade agreement with Mr Trump: “US keeps moving the goalposts”.

In an attempt to deescalate tensions, Washington dropped its plan for a blanket ban on companies working with Huawei.

Following talks between Mr Trump and Chinese President Xi Jinping at the G20 in Osaka it will instead issue licenses to allow relevant firms to trade.

Mr Trump tweeted: “At the request of our High Tech companies, and President Xi, I agreed to allow Chinese company Huawei to buy product from them which will not impact our National Security.

“Importantly, we have opened up negotiations.”

It is believed GCHQ has received complaints on the company’s approach to software bugs but Huawei has long denied it is a security threat.

Ben Wood, an analysis for CSS Insight, said the lack of British clarity is hurting mobile phone operators.

He commented: “It’s impossible for them to accurately assess what their addressable market will be and could trigger delays to the roll out of 5G”.

Whilst Nokia and Ericsson declined to comment when contacted by The Telegraph, a Vodafone spokesman said: “We take security very seriously. Any decision should not be rushed, but follow a fact-based risk-assessed approach.”