UK Bars Huawei from 5G, raising tensions With China

“As facts have changed, so has our approach,” Oliver Dowden, the government minister in charge of telecommunications, told the House of Commons on Tuesday afternoon. “This has not been an easy decision, but it is the right one for the U.K.’s telecoms networks, for our national security and our economy, both now and indeed in the long run.”

After the British government announced its decision, Trump took aim at Huawei during a news conference at the White House, saying the United States has “confronted untrustworthy Chinese technology and telecom providers.”

“We convinced many countries, and I did this myself for the most part, not to use Huawei, because we think it’s an unsafe security risk,” Trump said.

Trump also announced that he was issuing an executive order formalizing a declaration from late May that the United States would treat Hong Kong in the same manner as China rather than as a semiautonomous territory and would impose the same tariffs that it applies to China. He also said he was signing into law a bipartisan congressional bill that encourages sanctions against Chinese officials and entities that take part in the repression of Hong Kong, as well as financial institutions that do business with those parties.

The dispute over Huawei, the world’s largest maker of telecommunications equipment, is an early front in a new tech cold war, with ramifications for internet freedom and surveillance, as well as emerging technologies like artificial intelligence and robotics.

“The democratic West has woken up late to its overdependence on a country whose values are diametrically opposed to it,” said Robert Hannigan, a former head of the British digital surveillance agency GCHQ, who is now an executive at the cybersecurity firm BlueVoyant. “Huawei and other Chinese companies present a real cybersecurity risk, but the primary threat comes from the intent of the Chinese Communist Party, as we see in Hong Kong.”

Huawei described the announcement Tuesday as a disappointment and “bad news for anyone in the U.K. with a mobile phone.”

“It threatens to move Britain into the digital slow lane,” said Ed Brewster, a spokesman for Huawei U.K. “Regrettably our future in the U.K. has become politicized; this is about U.S. trade policy and not security.”

Until the latest turn of events, Britain had been welcoming of Huawei. In 2005, it was the first country to offer Huawei a foothold in Europe, now the company’s largest market outside China. Huawei financed university research and a charity started by Prince Charles. And just last month, Huawei announced plans to spend 1 billion pounds (about $1.25 billion) on a new research center in Cambridge.

The British experience shows the challenges nations face navigating the U.S.-China rift. In moving forward with the ban, Britain risks retaliation from China, one of its largest and fastest-growing trading partners, when it is trying to craft a more open trade policy outside the European Union. China’s ambassador in London, Liu Xiaoming, recently warned that Britain would “bear the consequences” of treating China with hostility.

“The Huawei issue is the first of many complicated decisions we’re going to have about striking the right balance between our commercial and economic engagement with China, and our security concerns about how China uses its power,” said John Sawers, a former chief of the British intelligence service MI6.

Huawei is the leading provider for towers, masts and other critical equipment needed to build new wireless networks based on fifth-generation wireless technology, known as 5G.

New 5G networks are seen as essential infrastructure in an increasingly digital global economy. The networks will provide faster download speeds for phone users but offer even more important potential for commercial applications in industries such as manufacturing, health care and transportation.

Huawei’s technological dominance in this field is viewed as a failure of industrial policy in the West. U.S. authorities have spent more than a year pressuring allies to keep Huawei out of communications networks, warning that the company is a proxy for Beijing and a threat to national security. The Trump administration encouraged the use of other telecom equipment-makers, including Sweden’s Ericsson and Finland’s Nokia.

At first, countries were resistant, unconvinced that Huawei posed a grave risk. Britain argued that it had a security system in place to ensure all Huawei equipment was reviewed before being put inside its communications networks. The announcement in January stipulated Huawei would be limited to “noncore” parts of the network.

A turning point came in May, when the Trump administration announced a rule that would bar Huawei and its suppliers from using U.S. technology and software. The decision, slated to take effect in September, could throw Huawei’s supply chain into chaos.

In Britain, the U.S. announcement added to pressure that Johnson faced from members of his own Conservative Party to take a harder line against China, especially after the events in Hong Kong. The government announced a review of its January decision after the U.S. punishments were announced.

“American sanctions left the U.K. with little choice,” said Priya Guha, a former British diplomat who represented the country’s interests in Silicon Valley. “There was a bit of checkmate by the U.S.”

The Trump administration has taken other steps, some conducted with little publicity, to undercut China’s position in communications networks.

The U.S. government on Tuesday published an interim rule that will bar Pentagon and NASA contractors from using technology from Huawei and other Chinese telecommunications companies. Some government contractors say the ban, passed into law two years ago, is too onerous, and the administration estimates it will cost some $12 billion.

In April, a group of agencies that calls itself Team Telecom, led by the Justice Department, moved to remove China Telecom, another big wireless company, from its operations inside the United States. It has long been operating “points of presence” in U.S. networks that help maintain internet connections. In a series of classified briefings, U.S. intelligence agencies accused it of experimenting with rerouting American traffic through China — though the purpose of that rerouting was unclear.

The same group moved last month to block the Pacific Light Cable Network — a partnership involving Facebook and Google among others — from operating an undersea cable linking Hong Kong and the United States, in what was supposed to be the highest-capacity undersea Pacific connection for internet traffic.

The Trump administration asked the Federal Communications Commission to block the connection in Hong Kong, citing concern it “would expose U.S. communications traffic to collection” by China, through a Chinese firm operating where the cable landed. Instead, it wants the commission to approve only direct connections to Taiwan and the Philippines, undercutting China’s effort to make Hong Kong a key data transfer hub. It cited the new national security law for Hong Kong, which at the time was still being drafted.

But it remains unclear if the steps involving Huawei and others will achieve Washington’s objective. Chinese firms will still control much of Asia’s traffic, and that means calls, data and searches will still move through Chinese switching systems. At best, the U.S. moves can make it harder for China’s leaders to cut off communications in times of conflict. But it cannot protect the United States from what Sue Gordon, the former deputy director of national intelligence, called the process of “living in a dirty network.”

Still, Robert Blair, a senior Commerce Department official who until recently served as the Trump White House’s chief telecommunications adviser, told a meeting of the Council on Foreign Relations on Tuesday that “we scored a major victory” with Britain’s decision.

In Britain, officials warned that its ban would add significant costs and delay the rollout of 5G by around two years. The new 5G wireless systems must be built atop existing networks that Huawei had a major role in constructing. In setting a 2027 deadline, the British government said moving any faster to remove Huawei gear would produce a greater risk to the security and resilience of the network.

The ban does not apply to smartphones and other consumer products made by Huawei, or equipment used in 2G, 3G and 4G networks.

Many see the Huawei dispute as foreshadowing future conflicts, with other prominent companies becoming entangled. Secretary of State Mike Pompeo said the United States was considering actions against Chinese apps, including the hugely popular social media service TikTok, which is owned by a Chinese internet company.

Britain’s decision to bar Huawei will put pressure on other European countries. In Germany, Chancellor Angela Merkel is being urged to keep the company out of a new 5G network but is weighing the economic fallout for German automakers, for whom China is a critical market.

“If Huawei is stopped in its tracks, that does represent a very important inflection point for China’s ability to achieve its objectives,” said Nigel Inkster, a senior adviser at the International Institute for Strategic Studies in London who has written a book on the technology battle between the United States and China.

Inkster warned that the West risks provoking China if it feels more economically isolated.

“There is a serious need to think hard and deeply about whether it is realistic to disengage from China totally in these areas,” he said.