Europe threatens 'further measures' against Huawei as Trump returns
The flame of TikTok was briefly extinguished for its American users at the weekend, prompting US tennis star Coco Gauff to speculate jokingly that she would have to read books instead. Thankfully, after a temporary reprieve for the Chinese social media site from Donald Trump, America's incoming president, the books can for now stay mouldering on the shelf. There was a hint in all this of the savior act Trump pulled several years ago when ZTE, a Chinese equipment vendor badly hurt by sanctions, was taken off the naughty list. It has never been returned to that list. But there seems little chance of any similar relief for Huawei.
What damage Trump can do that has not already been done to ZTE's bigger domestic rival is perhaps the question. Seen among opponents as an intellectual property thief, violator of trade rules and threat to security, Huawei has already been cut off from critical US technologies and the suppliers that use them. Despite this, it was able to launch a relatively advanced 5G handset in late 2023, and its 5G network products remain competitive. "I got the impression over the last few months that everyone thinks Chinese vendors have disappeared and that is not true," said Börje Ekholm, the CEO of Swedish rival Ericsson, last July.
US attention, then, may well focus on the willingness of other governments to let Huawei offer products in their countries. And the main concern is undoubtedly Europe. Under Trump 1.0, the other members of the Five Eyes alliance – an intelligence-sharing club of nations – were eventually persuaded to ban Huawei. Australia, Canada, New Zealand and the UK all did so before Trump's return (although the UK, at least, still has a lot of Huawei equipment to remove). But in some of Europe's biggest economies there has been no progress or apparent determination to act.
Sharp rebuke
Encouragingly, for Trump and his new lieutenants, there was a sharp rebuke from Henna Virkkunen, the European Commission's new vice president for tech sovereignty (among other things), during a panel late last week. Sat between Ekholm and Nokia CEO Pekka Lundmark, as the political meat in the Nordic sandwich, Virkkunen had some tantalizing remarks for the men in charge of Huawei's biggest rivals.
"The price of dependency on others is even higher," she said after warning that Europe could fall behind technologically. "We might not be able to keep ourselves safe. An important example for this is the case of 5G networks. I am very concerned about the fact that a significant number of the 5G sites across EU members states are still provided by high-risk suppliers. This has a potentially serious negative impact on security for end users and companies and to our critical infrastructure. As member states, they have implemented the 5G toolbox very unevenly. Further measures may be needed."
The 5G toolbox she refers to is a set of recommendations that EU member states are urged to follow. "High-risk" in this context has become the standard euphemism for Chinese vendors, which essentially means Huawei and ZTE. And Virkkunen's assessment sounds very similar to that of former EU commissioner Thierry Breton nearly two years ago. "Let me mention here that although 23 member states took legislative action to implement the toolbox, only seven of them have actually imposed the necessary restrictions," he told an audience in Helsinki in February 2023. "This is not enough."
Just how much Chinese 5G equipment is still in Europe's networks was the subject of a recent report by Strand Consult, a Danish advisory firm. Published in December, it shows that only six of 32 European countries (the 27 EU member states plus five others) had no Chinese products in their mobile networks in the second quarter of 2024. Some, including the powerhouse of Germany, had seemingly grown even more reliant on Huawei in 5G than they had been in 4G.
German resistance
As Europe's biggest economy, Germany and its stance are of critical importance, and Virkkunen's remarks suggest the European Commission is not happy with a proposed fix German authorities revealed last summer. Under that, German telcos have been ordered only to replace Huawei's core network technology, which all had previously done, and a part of its management system for radio access and transport networks. They have until 2029 to find a substitute, which would theoretically allow them to retain Huawei for most 5G products. Based on this, Strand Consult expects Huawei's share of radio access network (RAN) components in Germany to remain at 59% between now and 2028.
If it is hard to imagine what "further measures" the European Commission may have at its disposal, a belligerent Trump 2.0 is entirely conceivable if the administration is not distracted by other issues. John Strand, the CEO of Strand Consult, expects to see a resurrection of the "Clean Networks" concept, under which other countries were pressured to adopt so-called "Trusted Vendors," as opposed to the high-risk ones of EU jargon.
"Without a sustained State Department effort, many of the countries and companies which promised a Clean and Trusted Network experience did not follow through," said Strand in emailed comments. "This is one priority which the new administration probably will pick up, a no-brainer for security in an unstable world."
There is, he thinks, likely to be less interest than there was under the Biden administration in promoting open RAN, which allows an operator to combine parts and software from different suppliers at the same mobile site. Its US political supporters believed open RAN would help cultivate American alternatives to big kit vendors, but none has made progress since Trump was last in the White House. "Open RAN has failed as a commercial and security solution," said Strand.
While others disagree with that take, the main winners from open RAN tenders so far appear to have been the big Nordic kit vendors promising compliance with open RAN specifications. And a German backlash against Huawei would clearly suit Nokia. Deutsche Telekom, Germany's biggest operator, has chosen the Finnish company as its main open RAN vendor and last year confirmed it would be replacing Huawei at 3,000 sites, about a tenth of the national total. With Ericsson accounting for about one third of Deutsche Telekom's footprint, Nokia will obviously hope it can land further RAN business at Huawei's expense.
Government resistance to a Huawei ban is explained by cozy relations with China, Germany's biggest trading partner in 2023, according to official data. The fear is that China would retaliate against a Huawei ban, hurting exports of German cars and machine tools. Yet if China topped the 2023 ranks with €254.2 billion (US$262.3 billion) worth of imports and exports, the US was a close second on €252.5 billion ($260.5 billion). Under Trump, it looks prepared to use tariffs and other trade threats to get its way. Huawei's most loyal customers will not welcome his return.
