Those remarks were “a bit pre-emptive,” said Carisa Nietsche, a researcher at the Center for a New American Security, a Washington think tank.
But there is “the beginning of a sea change in Europe,” Nietsche said.
European countries and mobile carriers are now worried that Huawei won’t be able to provide 5G infrastructure as promised given the “massive hit to their business” from the new US export controls, she said.
Huawei’s 5G business in ‘grave danger’
That would prove to be all too true.
Without those chipsets, Huawei can’t build 5G base stations and other equipment, according to analysts at brokerage firm Jefferies.
“Based on the current direct export rule that the US put on, I really think that Huawei’s 5G equipment business is in grave danger,” Jefferies analyst Edison Lee said on a recent call with investors.
“If the law doesn’t change, and if the US-China tension does not de-escalate, then I think there’s a big risk that Huawei will stop being able to provide 5G equipment” from early next year, he added.
Asked for comment for this story, Huawei spokeswoman Evita Cao said “we continue to receive support from our customers,” without going into further detail.
The company said in May that it “categorically opposes” the latest US sanction, calling the new rule “discriminatory.”
“It will have a serious impact on a wide number of global industries” and damage “collaboration within the global semiconductor industry,” Huawei said in a statement. “We expect that our business will inevitably be affected,” it added.
That may already be happening in the United Kingdom.
“I am not a Sinophobe, I won’t be drawn into Sinophobia,” Johnson said on Tuesday. But “I do want to see our critical national infrastructure properly protected from hostile state vendors, so we need to strike that balance.”
Huawei said earlier this year that it has secured 91 commercial 5G contracts, more than half (47) are in Europe, 27 are in Asia and 17 are elsewhere in the world.
Critics also say Beijing could force Huawei to spy on other nations. Huawei says that has never happened and if it did, the company would refuse such orders.
Yet even as it claims independence from Beijing, Huawei has been caught up in sparring between China and the United States, and to an increasing degree, the European Union and countries such as India that are growing more wary of China.
There are now “excellent signals” coming from Germany and the United Kingdom “that they will move to exclude or at least will take Huawei out of the core [5G] network,” said Nietsche. Germany, for instance, is scrutinizing Huawei’s data flows to see if the company is breaching European laws, she said.
India, meanwhile, had been going back and forth over whether to include Huawei equipment in the country’s 5G network, said Chaitanya Giri, an analyst with Indian foreign policy think tank Gateway House. Huawei received the green light to participate in 5G trials late last year.
But tensions between New Delhi and Beijing have risen dramatically in recent weeks after at least 20 Indian soldiers were killed in border clashes with Chinese troops stationed in the Himalayas. China has also been singled out in India for blame over the coronavirus pandemic, according to Giri.
Huawei may now get caught up in the escalating tensions, according to Giri. Public sentiment has now “consolidated, that we are not going to use any of the Chinese equipment,” he said.
What Europe and India share, according to Giri, is a growing sense of unease following years of substantial investment by China.
“Big democracies right now are singing in a chorus,” he said. “They understand what’s at stake.”