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The Guardian - UK
The Guardian - UK
Heather Stewart and Kate Proctor

Mike Pence hints UK's Huawei decision could jeopardise trade talks

US vice-president Mike Pence.
The US considers the Chinese technology firm to be a security risk and UK has labelled it a ‘high-risk vendor’. Photograph: Nicholas Kamm/Getty

US vice-president Mike Pence appeared to hint on Friday that White House disquiet at the involvement of Huawei in building the UK’s 5G network could jeopardise trade talks between the two countries.

Pence told the US broadcaster CNBC: “The United States is very disappointed that the United Kingdom has decided to go forward with Huawei.

“We are profoundly disappointed … When I went at the president’s direction in September I met with Prime Minister Johnson and I told him the moment the UK was out of Brexit we were willing to begin to negotiate a free trade arrangement with the UK.”

Asked whether the decision could prove a “deal-breaker”, he replied: “We’ll see.”

The US considers the Chinese technology firm to be a security risk – but also appears to be exercised about its commercial dominance.

Trump’s attorney general, William Barr, has even said this week that the US should be “actively considering” buying up stakes in Huawei’s rivals Nokia and Ericsson, to offset Chinese control of the telecoms sector, “either directly or through a consortium of private American and allied companies”.

The British government has been keen to press ahead with trade negotiations with Washington.

In a written ministerial statement published on Thursday, the international trade secretary, Liz Truss, said: “A key priority is to deepen trade and investment relationships with like-minded partners, starting with the USA, Japan, Australia and New Zealand.”

She set out some of the government’s aims, including opening up more of the lucrative US services market to British companies.

But London and Washington have clashed over a series of policy issues in recent weeks, including the chancellor’s determination to press ahead with the digital services tax.

The initial reaction from US officials to the Huawei decision was muted, but it emerged on Thursday that the president vented his exasperation in a phone call with Boris Johnson last week. Trump was “apoplectic”, sources with knowledge of the call told the FT.

The UK has said it will allow Huawei to be involved in building “peripheral” parts of the 5G and full-fibre network, despite labelling it a “high-risk vendor”.

It will also introduce a new regulatory framework aimed at ensuring the Chinese firm’s share of the 5G market cannot exceed 35% – and can be reduced over time.

Several high-profile Conservative MPs, including former cabinet ministers David Davis and Iain Duncan Smith, have expressed concerns about the decision.

Some backbench rebels are pressing the government to announce a deadline for removing Huawei from the UK altogether.

One Tory rebel said they had been emboldened by news of Trump’s anger, and would continue to demand concessions from No 10.

A spokesman for the prime minister declined to be drawn on the Trump conversation, merely repeating the official readout from the call at the time, which said Johnson had, “underlined the importance of like-minded countries working together to diversify the market and break the dominance of a small number of companies”.

Truss’s job had been widely thought to be at risk in the forthcoming reshuffle, which is expected next Thursday, but Johnson repeatedly name-checked her in his Brexit speech last Monday.

She had pressed for negotiations with the US to kick off immediately, in parallel with talks with Brussels over the future relationship with the EU27.

The foreign secretary, Dominic Raab, is on a tour of Australia, Japan and New Zealand this week, seeking to underline the UK’s determination to strike up closer trading relationships with countries beyond the EU after Brexit.

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