The United Kingdom announced a few days ago that it will gradually exclude Chinese Huawei from the country's 5G networks by the end of the year, due to national security concerns . As a result, British mobile operators will have to remove Huawei equipment from 5G networks by 2027. This decision seems to favor Huawei competitors such as Nokia and Ericsson. However, both of these tech giants use China as a significant part of their supply chain, which means they could be hit with restrictions on the export of network equipment made in the Asian country.
The US , for its part, imposed new restrictions on Huawei and other Chinese tech giants in May, hindering their ability to work with American software and chipmakers that use American intellectual property or equipment. Specifically, the new rules will prevent Huawei from using TSMC to make the chips inside devices . The tactics have sparked a backlash in China, with the Asian country considering imposing a similar ban on American companies such as Apple, Qualcomm and Cisco.
In France, government officials are considering a similar decision and have issued recommendations for telecom providers to avoid building their infrastructure using Huawei equipment. Other European Union countries are expected to gradually follow suit.
According to a report by the Wall Street, this has turned Beijing’s attention to the EU and it is ready to retaliate for similar measures adopted by EU member states. Specifically, after the Huawei ban, China is considering imposing export controls on Nokia and Ericsson to prevent their products from reaching China and other countries. However, Beijing will only proceed with this move if European countries exclude Chinese companies from 5G networks.
Nokia and Ericsson have been looking at their options to deal with potential restrictions and are considering moving production elsewhere in Asia or even Europe. This process had already begun last year as a way to avoid US tariffs and is likely to accelerate if China decides to intervene in Nokia and Ericsson's operations.
