Since the last few days, the US was pressurizing the UK to put a complete ban on the involvement of Huawei, the Chinese technology giant with 120 billion dollars annual revenue, in the country’s 5G infrastructure. The Boris Johnson led UK government has finally complied and has drawn up a 3-year plan to remove Huawei’s role in its 5G infrastructure, reported The Telegraph, one of Britain’s biggest media houses.
The US and UK are in talks to sign a free trade deal before the next American Presidential election which falls in November 2020. Trump is ready to give concessions to the UK on many fronts but the only condition is to shut the doors for Huawei.
Read: “It is either them or us,” US tells UK to choose one trade partner and it better not be China
Earlier, in January this year, Johnson agreed to put a partial ban on Huawei, limiting its role to 35 percent market share and a ban on the supply of critical equipment, after US pressure. But the US government is hell-bent on the complete ban and now Johnson has decided to give up and phase out Huawei’s involvement by 2023.
According to a UK government source quoted by The Telegraph, “He (Johnson) still wants a relationship with China but the Huawei deal is going to be significantly scaled back. Officials have been instructed to come up with a plan to reduce Huawei’s involvement as quickly as possible.”
Huawei is already banned in Japan, Australia, New Zealand, and the United States over the National Security issue. Now the Trump administration is pressurizing other countries to put a ban on the company. Only Canada among the five eyes countries- the security agencies of Anglophone countries (UK, US, Canada, Australia, and New Zealand) are called five eyes- has not put a complete ban on the Chinese giant, as it has Trudeau’s liberal government.
The Chinese government threw all its might behind Huawei and got the project for the company in many countries despite political pressure from the US. But, after the outbreak of Coronavirus Trump got another chance to take on Chinese tech giant, and this time, it seems, he is succeeding. First Trump banned the import of semiconductors, an essential devices for any consumer electronics or telecommunication device, for Huawei; and now he got the company banned in the UK.
A few days ago, the United States government gave Britain a choice- to choose between the US and China. US bureaucrats highlighted that Britain cannot go on with continuing 5G infrastructure with Huawei and expect a free trade deal with the US. The British Prime Minister Boris Johnson took only a few days to make the choice and ditched China in order to get closer to the US, as expected.
Business with the US is more beneficial and essential for the UK compared to China. As per the British parliament library website, UK exports to China were worth £22.6 billion; imports from China were £44.7 billion, resulting in a trade deficit of -£22.1 billion. On the other hand, the US is the largest trading partner of the United Kingdom with bilateral trade amounting to 261.9 billion dollars in 2018 or 10 percent of the UK’s GDP. Exports to the US were 140.4 billion dollars while imports were 121.5 billion dollars, resulting in a trade surplus of 19 billion dollars.
Also, UK is the single largest investor in the US with an investment of 540 billion dollars while the US’s total investment in the island country is 750 billion dollars, or 12 percent of its total FDI.
Historically, the UK and the US had been allies at least since American independence. Most influential families of the US trace their roots to the UK and the Northeastern part of the United States is also known as New England. Both countries have coordinated in almost every foreign policy matter historically, including in American wars in the Middle East. Therefore, for Johnson, US is the obvious choice.