Huawei 5G ban: US dragging Germany into harmful economic war with China, warns industry union head

Washington seeks to enforce its China policy upon its allies, a German industry union head has said in a rare remark. He warned that conceding to Washington’s demand to ban the Chinese giant Huawei would be harmful for Germany.

The US apparently pushes a motto “whoever my enemy is, must also be my friend’s enemy,” Dieter Kempf, the chief of the Federation of German Industry (BDI), said, commenting on Washington’s continued efforts to derail the business of the Chinese telecommunications company.

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The US wants its allies in Europe and elsewhere to ban Huawei from taking part in developing the latest generation of 5G mobile networks on their territories.

The US might “be tempted to use its economic might to enforce its own sanctions on others,” Kempf said, adding that the approach contradicts the very idea of “free, rules-based international trade,” which Europe cherishes.

He also warned that yielding to Washington’s demands would simply “make no sense” and harm Germany’s own economic interests.

Banning Huawei from the 5G development tender would “significantly” narrow that choice of competitors, directly impacting on the final contract price, Kempf said – making the same point as the German network operators.

“However, political consequences are much more important,” he added, warning that “China might be tempted to retaliate against the German companies elsewhere.”

The comments came as the German government met to discuss the requirements that any potential contractors should meet to enter the tender on 5G development on Wednesday. The ministers were also expected to discuss the case of Huawei in particular, the German media reported, citing government sources.

While the final decision is expected no sooner than next week, Berlin has so far decided not to sideline the Chinese telecommunication giant, reports have suggested. Instead, the government plans to tighten security regulations for contenders.

The list of potential measures reportedly includes setting up a laboratory under the oversight of the German cybersecurity watchdog (BSI) tasked with examining all the critical infrastructure equipment, and a no-spy pact with China.

“I believe the right path would be to make sure we manage our risks when it comes to tenders,” Kempf said. “We must convey our reservations to the Chinese side and make it clear what we will not tolerate in our legal system,” he added. Meanwhile, a spokesperson from the German Economy Ministry said that any new rules would apply to all 5G providers.

Washington has accused Huawei of spying, and of posing a security threat to the US and other nations – something that the tech giant has vehemently denied. In response, Beijing lashed out at the US over what it called an attempt to “strangle” Chinese firms.

Meanwhile, two US allies, New Zealand and Australia, have already barred Huawei from assisting in building 5G networks. Washington has so far banned its government agencies from using Huawei’s technology and is mulling a ban on 5G rollout, while the UK and Canada are also reviewing the telecom giant’s access to their markets.

Huawei threatened to pull out from the markets where it is “not welcome.” At the same time, it also set up information security labs in Germany and the UK to show that its equipment does not contain any “backdoors” that could be used for spying. Most recently, it also offered to create such a center in Poland following an arrest of a Chinese Huawei employee there on spying charges.

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