Politics & Economics

Huawei: Taking back control?

01 August 2020
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By Peter Main

Donald Trump’s boast of his role in the UK decision not to use Huawei equipment for 5G – “I did it myself for the most part … I told many countries that, if they want to do business with us, they can’t use it” – throws a clear light on the realities of world politics. Whatever Leave voters may have believed Brexit would bring, this was exactly the relationship that US Alt-Right figures like Robert Mercer and Steve Bannon had in mind when they backed Farage and the Leave campaign.

Although Barack Obama, with his “Pivot to the Pacific”, had already signalled Washington’s dawning realisation of China’s potential as a world power, this was far too timid for the hawks of foreign policy. For them, proof of the danger was provided by David Cameron’s government opening the door to practically unlimited Chinese investment into the UK – he even laid on a state visit and dinner with the Queen for Xi Jinping.

Coupled with the One Belt, One Road foreign investment strategy Xi had adopted, the way was open to a future economic rival straddling the Eurasian landmass. At all costs, that had to be stopped. Undermining the fragile unity of the EU through Brexit marked a strategic advance towards that goal.

The Huawei issue also underlines the differing strengths and weaknesses of the two main imperialist rivals. China now has the edge on the US in the production of such high-tech equipment – that in itself would have been unthinkable not so long ago. Nonetheless, part of the technical design of the microprocessors used by Huawei originates in the US and the ban on its use is what gave Trump leverage.

Huawei, naturally, had stockpiled supplies so that production could continue but, once the US ban was proclaimed, any country using the completed equipment would be “guilty” of breaking the US sanction. That was the basis upon which Trump could make his, very real, threat, “… if you want to do business with us…”. Any country that refused to comply would open itself to US sanctions, and the US still controls the world’s financial system. Any country contemplating refusal would only need to ask Venezuela what the consequences could be.

As for the UK, having triumphantly “taken back control” from Brussels, it finds itself wide open to bullying from all sides. Washington can obviously dictate the terms of any “free trade” deal, Brussels can impose tariffs on exports and, possibly, begin freezing the City of London out of its financial system, and Beijing can either withdraw its huge investments or demand concessions in other sectors to offset Huawei’s loss.

From London’s point of view, what could possibly go wrong?

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