Huawei under pressure in Europe, U.K.

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Huawei

The U.S. ‘war on Huawei’ is getting some ballast from across the Atlantic.

 

First, there’s breaking news that Belgium has decided to go with Nokia for upgrading its 5G systems, and cutting Huawei out of the equation, after the Chinese company had provided hardware to the European nation for quite a while.

 

“The move by Orange and Proximus represents one of the first cases in Europe where commercial operators have dropped Huawei from their next generation mobile Internet, or 5G, networks in response to political pressure,” write Mathieu Rosemain and Supantha Mukherjee at Reuters. “The deals to supply radio gear to Orange Belgium and Proximus are a boost for Nokia, which struggled to make headway in the 5G market earlier this year even as Huawei was under pressure.”

 

Nokia is up 3% on the news.

 

Also today, international analysts are considering a move in the UK Parliament to ban Huawei from that country’s operations where legislators propose a timeline for a full on tethering of Huawei contracts by 2027.

 

“The West must urgently unite to advance a counterweight to China’s tech dominance,” Tobias Ellwood, chairman of the defense committee, has reportedly said in explaining the effort. “We must not surrender our national security for the sake of short-term technological development.”

 

Despite the U.K.’s concurring opinion, it’s notable that no one is providing extremely clear evidence of Huawei conspiring with the Chinese government, which the company emphatically denies, but that there’s a growing consensus that using Huawei’s hardware may be risky.

 

All of this has enormous ramifications for the tech market. If you have any holdings that are related to semiconductor manufacturing, telecom or even AI, you’re well served to keep on top of this colossal controversy that will determine how governments impact markets in 2021 and beyond. Sure, there’s also the TikTok saga, and massive agricultural tariffs in place on both sides of the Sino-U.S. table, but the Huawei case is different. It has to do with the frontier of global tech development, with a big political thumb on the scale.

 

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