US offers Brazil money to not use Huawei as China turns on Sweden
A new front has opened up in the Trump administration’s ongoing trade war with China, while China has made its feelings clear about Sweden’s recent ban.
This time the setting is Brazil, where – according to a
Reuters report late on Tuesday – a US trade delegation visiting the capital
Brasilia offered financing to telcos that source network equipment from vendors
other than Huawei.
The delegation was led by national security advisor Robert
O’Brien, who met with Brazilian President Jair Bolsonaro ahead of the signing
of a bank financing agreement that paves the way for further cooperation
between the two countries in several industry sectors, 5G being one of them.
Huawei, with its competitively-priced products, already
supplies Brazilian telcos. However, with the government preparing to auction 5G
spectrum next year, it is a good time for Washington to exert its influence in
an effort to convince them to shop elsewhere.
“China has made a very significant move in Brazil. They’re
Brazil’s biggest trading partner, so it’s something that we’re concerned
about,” said US trade representative Robert Lighthizer, in the report.
The US does a fair amount of business with Brazil too. In
2019, the US exported $67.4 billion worth of goods and services there, and
imported $37.6 billion. Both Trump and Bolsonaro are keen to increase trade,
but it looks like Brazil will first have to toe the US line on Huawei.
Already this week we have seen Sweden close the door on
Huawei. The Swedish Post and Telecom Authority (PTS) on Tuesday banned
operators from procuring new equipment from both Huawei and ZTE for use in
networks rolled out in the 2.3 GHz and 3.5 GHz bands. Telcos planning to
repurpose any of their current Huawei and ZTE gear for use in these networks
must phase it out by the start of 2025.
That decision could have negative consequences for Swedish
kit maker Ericsson though.
“Without any evidence, the Swedish side used national
security as an excuse to groundlessly discredit Chinese companies, openly
suppress Chinese telecommunications companies, and politicise normal economic
cooperation,” said Zhao Lijian, a spokesman for China’s foreign ministry in a
pointed statement. “The Swedish side should uphold an objective and fair
attitude, correct wrong decisions, and avoid negative impacts on Sino-Swedish
economic and trade cooperation and Swedish enterprises’ operations in China.”
Still, Huawei has a somewhat unlikely ally in Japan – for
now at least. According to reports last week, the government will decline to
sign up to any framework that bans 5G equipment supplied by specific countries,
and will instead take its own measures to assess the risk of using Huawei’s
products. However, at the same time, Japan is also keen to strengthen
cooperation with the US on cybersecurity, so it would come as little surprise
if Tokyo subsequently falls in line with Washington.
With Sweden siding with the US, but Japan keeping its own
counsel for the time being, it is perhaps too tricky at this point to predict
which way Brazil will swing.
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