The White House is mulling a new approach to challenging the global positions of China's Huawei in the telecommunications market by incentivising US companies, such as Cisco, to buy European telecom companies and using them to strengthen their positions as producers of equipment for service providers and mobile operators, The Wall Street Journal reported.
According to the media outlet, Washington discussed the possibility of the move with US tech giants, which have slacked considerably in terms of catching up with the newest market trend – the deployment of 5G networks.
"For the first time in modern history, the United States has not been the leader in an emerging wave of critical technology", a paper circulating in the White House and obtained by the WSJ said.
However, these talks have not been fruitful so far, as the American companies were uninterested in acquiring low-margin businesses, like Ericsson and Nokia, which were suggested by Washington, The Wall Street Journal reported, citing sources. These talks also stalled partially due to the coronavirus pandemic, which forced Washington to delay meetings, the Journal added.
Before that, Trump administration reportedly discussed several schemes to use the two companies in efforts to "dethrone" Huawei from its current positions. Among them were providing companies tax breaks in the US, export-bank financing or by providing financial support to a group that would buy the European tech giants, according to the media outlet.
The choice of two companies was not random: along with Samsung, Ericsson and Nokia are the biggest telecom equipment suppliers outside Huawei, which holds around 28% of the market, the outlet noted. The existing status quo dissatisfies the US, which has been seeking to limit the Chinese giant's influence under the pretext of claims that it has enabled Beijing to spy on its clients.
Last year, Washington banned Huawei from its soil and limited American firms' ability to trade with it in a bid to deprive Huawei of much needed US software and chips. The company, which vehemently denies Washington's claims, has apparently found other sources of required equipment and promised to find a way to operate without American products. Beijing, which also denies the accusation, in turn, also vowed to retaliate in response to US actions purportedly directed to help American companies compete with Huawei.