Sunday, 05 July 2020

US money could lock Huawei out of Brazil – and more countries could follow

by Harry Baldock, Total Telecom
Tuesday 16 June 20

The US ambassador to Brazil suggests the American government may help finance Brazil’s 5G infrastructure in order to block out the Chinese vendor

The ongoing trade war between the US and China has had major implications for the global telecoms market. In May, the US tweaked their sanctions against US tech giant Huawei, effectively severing the vendor from its superconductor supply chain. Meanwhile, they continue to pressure nations around the globe to ban the Chinese equipment for security reasons…

The ongoing trade war between the US and China has had major implications for the global telecoms market. In May, the US tweaked their sanctions against US tech giant Huawei, effectively severing the vendor from its superconductor supply chain. Meanwhile, they continue to pressure nations around the globe to ban the Chinese equipment for security reasons, with varying degrees of success. 
 
Now, however, the US may be beginning to put its money where its mouth is. In an interview with Brazilian newspaper Folha de S.Paulo, the US ambassador to Brazil, Todd Chapman, suggested that the US was in talks to help finance Brazil’s 5G infrastructure in order to block out Huawei.
 
Focus would instead be placed on vendors held in higher regard by the US, such as Ericsson and Nokia, the ambassador explained.
 
“There have been some conversations in Brazil, including with my participation,” said Chapman.  “And this is also happening in other parts of the world, it’s not only in Brazil that we want to work with Ericsson and Nokia.” 
 
The funds would reportedly be provided by the International Development Finance Corporation, a bank set up in 2018, in part to counter China’s own international development goals.
 
The US continues to insist that its actions against Huawei are in the name of national security, while the Chinese company argues that it is not controlled by the Chinese government and that the US is merely trying to deal China economic damage and minimise competition.
 
Huawei has a long history of working in Brazil, spanning two decades, and is currently working with all four of the country’s major operators. A decision to exclude Huawei from the country’s 5G supply chain would be a serious undertaking – whether or not financial incentives from the US will be enough remains to be seen.
 
If these sorts of conversations really are taking place in other countries around the world, then this is yet another sign that the ongoing rivalry between the US and China over 5G tech is reaching boiling point. The Chinese government does not take kindly to what it views as an attempt to stifle free trade and it would not be unsurprising to see some form of economic retaliation. The geopolitical battle for 5G rages on.
 
 
How is geopolitics affecting the global supply chain and how its resilience be ensured? Find out from the experts in Total Telecom's latest webinar. Register here.
 
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