Mexico. After months of discussions, warnings and potential threats, the National Security Council of the United Kingdom pronounced on the involvement of the Chinese company Huawei, in the development of 5G communications networks in that nation.
This decision, which was born out of a US concern and ban, gives the green light to the continuity of operations of the Chinese company in the supply of equipment and infrastructure components for telecommunications providers in the United Kingdom. This, despite the Fact that the Trump administration warned about the alleged risks to national security and sovereignty.
The British government defined some limitations applicable to the manufacturer: it will not be able to participate in critical network or security elements, nor can it have a geographical presence in military bases and nuclear sites, nor exceed a share of more than 35% in the access infrastructure market.
Trade War and Clash of Nations. Both governments (British, German and others), as well as industry voices (same American and European companies) and even areas of the US government, have warned of the costs that a trade war between the US and China would cause to the economic and social ecosystem of the world. They argue that it would potentially trigger curbs on intelligence sharing between countries belonging to the so-called "Five Eyes" group (US, UK, Canada, Australia and New Zealand) that choose to allow the acquisition of network components from Chinese companies.
U.S. efforts to get that bloc of countries and some others in the West to ban Huawei's operation on their territories seem fruitless. Only Australia has aligned itself with the US trade blockade and it is expected that, following the decision of the British government, the European Union will pronounce itself in a similar direction.
Disagreements between US Institutions. The blockade pressure of the Chinese company has not only caused differences between countries, but even between institutions of the US government.
The Defense Department has expressed concern about the impact the trade ban on Chinese technology could have. He has said that U.S. companies that will not be able to continue trading with companies like Huawei will lose a key source of revenue, while also being deprived of enough research and development funding to compete for a technological advantage.
For the definition of the specific rules that will apply in the trade and development of 5G networks with components of companies of Chinese origin, the approval is required, not only of the Department of Commerce who imposed the initial veto in May 2019, but also of the Departments of State, Defense, Treasury and Energy.
Thus, we also see an internal conflict between entities of the Trump administration.
The evidence together reveals that not only is it a conflict of a nation or bloc of nations against a company of Chinese origin, Huawei, but it has already transcended the ties of collaboration between nations and has provoked oppositions within governments.
A continued geopolitical conflict of this kind would not only result in a delay in the deployment of 5G, but would most likely result in a global recession.
Therefore, this geopolitical crisis from the field of ICT is not a minor issue.
Text written by Ernesto Piedras of The Competitive Intelligence Unit.
