Saturday, 28 November 2020

US puts its money where its mouth is with $1bn financing offer for Brazil to ditch Chinese 5G

by Harry Baldock, Total Telecom
Wednesday 21 October 20

The Trump Administration has made good on its promises of financial incentives to nations willing to ban Chinese telecoms tech

Like so many countries around the world, Brazil has not escaped US pressure to ban Huawei and other Chinese telecoms tech suppliers like ZTE from its 5G networks. However, unlike most others, Brazil is set to receive a direct financial incentive from the US to turn their backs on China, with the US government yesterday promising £…

Like so many countries around the world, Brazil has not escaped US pressure to ban Huawei and other Chinese telecoms tech suppliers like ZTE from its 5G networks. However, unlike most others, Brazil is set to receive a direct financial incentive from the US to turn their backs on China, with the US government yesterday promising £1 billion in financing for US imports.
 
The deal reportedly includes loans, guarantees, and insurance for the Brazilian import of US goods and services, “especially in the telecommunications area”, according to National Security advisor Robert O’Brien.
 
Brazil is currently on the cusp of upgrading its existing telecommunications infrastructure to 5G, with the choice of potential vendors a major source of economic and political conflict for China and the US. 
 
On the one hand, China is Brazil’s largest trading partner and Huawei is a well-established staple of almost all the country’s current telecoms networks. Back in July, Huawei officials warned that efforts to limit Huawei in Brazil would negatively impact customers and would lead to significant delays in 5G rollout.
 
On the other hand, Brazil’s controversial right-wing President Jair Bolsonaro is historically no friend of China but is growing increasingly close to US President Donald Trump, calling for his re-election earlier this week. In addition, recent trade agreements between the US and Brazil could see the formers economic importance grow rapidly via boosts to industries including steel, ethanol, and sugar.
 
Combine these factors with the ever-present claims that Huawei is a national security threat, and it is clear why one senior US official told Reuters that “the tide has turned on Huawei in Brazil” earlier this week. 
 
Meanwhile, Huawei continues to face similar pressures throughout Europe. Earlier this week Sweden announced that the company would be banned from its upcoming 5G infrastructure tender. The UK has already begun the process of phasing out Hauwei by 2027, while France is lining up a de facto ban by 2028 and Germany is tightening cybersecurity laws that will make working with Huawei difficult.
 
It seems that the dominos are falling for Huawei on either side of the Atlantic.  
 
 
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