Posted on Jan. 15, 2020, 4:22 p.m.Updated on Jan 15, 2020 at 5:31 p.m.
It is a way of preparing the next negotiations with China… While Beijing and Washington signed the
first phase of their commercial agreement
, US Senators Introduced Legislation to Fund Competing Companies in Huawei.
The objective is to block the current Chinese equipment supplier
world leader in the 5G market
, and suspected of spying by the United States. He is also accused of benefiting from… subsidies from the Chinese State, notably through loans at reduced rates, which would give him an unfair advantage over his competitors.
The law, backed by both Democrats and Republicans, could create a new $ 750 million fund for companies developing 5G technologies, as well as another $ 500 million fund for companies deploying “Reliable and secure equipment around the world”. The project does not name any company but would have been drafted with the aim of thwarting Huawei’s plans, whose advantageous tariffs appeal to local communities, despite the restrictions introduced by Washington.
The funds would be financed by a 5% levy on the auctions organized over the next five years on frequencies. Washington is expecting tens of billions of dollars from these auctions, in which American operators should participate.
Huawei, for its part, is concerned about the definition of “Reliable and secure equipment”. “This part is incorrect and is not necessary, in my opinion”, reacted in the
“Wall Street Journal”
Andy Purdy, director of security for Huawei in the United States. For the equipment manufacturer, the pressure increases. While it has held up rather well so far, it
expects to experience a difficult 2020
, and even claims to play its “survival”, because of the reluctance of many countries to entrust it with the keys to their 5G.
For the United States, the stakes are twofold. It is to short-circuit the influence of Huawei, which has managed to establish itself in many markets, including among Washington’s allies. But the government also wants to encourage the growth of American companies in a sector where the country is completely absent today. So far, America has left the field open to Asian equipment manufacturers (Huawei, Samsung) and European (Nokia, Ericsson).
Robert Strayer, head of cybersecurity and communications technology at the US State Department, recently acknowledged that Nokia and Ericsson were “Very competitive” in this market. But he also announced Washington’s wish to see American companies develop.
“5G is the basic infrastructure for future communications, but these are also practical cases: autonomous cars, telemedicine. […] Economic growth will be generated,
he explained to the ‘Echoes’
. 5G is therefore essential to supply the entire value chain. Future versions of this technology will also allow new players to enter the market, it’s about being ready. “
The United States is also seeking to tighten sanctions against Huawei. The administration already prohibits American companies from selling equipment to the Chinese supplier. It can even prevent other countries from doing so, if the material contains at least 25% of components produced in the United States. The trade secretariat may soon publish a decree lowering this threshold to 10%. This would also apply to components with low technological value.