The Huawei 5G decision will have global repercussions in the world of intelligence

The first real test of the renewed special relationship between Britain and the US has ended in accusations and recriminations, with warnings from Washington that trade deals and intelligence-sharing are in danger of being jeopardised.

The announcement that the Chinese company Huawei will be allowed into the UK’s 5G network, despite intense and sustained efforts to block it by the US, is a significant blow to the extra-special rapport which was supposed to blossom between the Trump administration and Boris Johnson’s government.

There was flickering hope among Whitehall officials that Trump, who is in the habit of declaring diplomatic victories where none may exist, will be satisfied with claiming that the restriction of Huawei to the “non-core fringe”, and capping its market share to 35 per cent of the UK 5G network, was the result of his tough messages to Johnson.

But instead, what happened is being seen as a defeat for Trump; something which is unlikely to go down well with the notoriously thin-skinned president.

Newt Gingrich, a senior Republican and former speaker of the House of Representatives, wanted to stress that the “British decision to accept Huawei for 5G is a major defeat for the United States. How big does Huawei have to get and how many countries have to sign with Huawei for the US government to realise we are losing the internet to China? This is becoming an enormous strategic defeat.”

Another Republican, Senator Tom Cotton, saw the defeat as that of the UK: “I fear London has freed itself from Brussels only to cede sovereignty to Beijing ... This is like allowing the KGB to build the telephone network during the Cold War. The CCP [Chinese Communist Party] will now have a foothold to conduct pervasive espionage on British society and have political and economic leverage on the United Kingdom.”

There is, however, a widespread debate taking place over Huawei internationally and Downing Street’s decision is likely to have an effect on a number of other states, including Nato members, considering whether to let the company into their telecommunications infrastructure.

The fact that the US had failed to persuade London to keep out Huawei will strengthen those arguing for its inclusion in these countries. They can use the argument that the British intelligence services, which have carried out the one of the most thorough investigations into the threat posed by the Chinese multinational, have concluded that it can be contained.

The European Union is due to unveil a “toolbox” on Huawei this week. No outright ban is expected, and the commissioner for internal markets and services, Thierry Breton, of France, has made a point of stating that the union will assert its sovereignty as an alliance in making decisions and not bow to outside pressure.

Huawei has sought to exploit the transatlantic rift. Abraham Liu, the company’s most senior executive in Europe, claimed that its ethos is closer to that of Europe than Trump’s America. “Europe’s values of openness, innovation and the rule of law have led to it being a powerhouse in mobile communications, and Huawei shares these values,” held Liu.

Victor Zhang, the company’s vice-president, said: “Huawei is reassured by the UK government’s confirmation that we can continue working with our customers ... This evidence-based decision will result in a more advanced, more secure and more cost-effective telecoms infrastructure that is fit for the future. It gives the UK access to world-leading technology and ensures a competitive market.”

The US has been adamant that giving the company any role will act as a contagion. US treasury secretary Steve Mnuchin argued at the weekend that a Huawei deal would be a “critical threat” to infrastructure. Mike Pompeo, the secretary of state, who was among the latest senior figures in the US administration to stress this message, will be meeting Johnson when he arrives on a 24-hour visit to the UK today.

Both Trump and Pompeo had warned that the presence of the Chinese company will inhibit intelligence-sharing with the UK, especially when it comes to the Five Eyes network of US, UK, Canada, Australia and New Zealand.

Tim Morrison, a former National Security Council adviser to Trump, insisted that Washington was totally serious about the warning and Huawei’s presence would do “incalculable” damage to the “special relationship”.

On a visit to London, he stated: “In 5G there is no fringe. There is only core. And if Huawei is allowed into any part of your network, it is allowed into every part of your network.

“We are talking about allowing the Chinese Communist Party into the telecommunications system, into the healthcare data, into the personal financial records of every Briton, and, frankly, into the heart of the most successful security alliance, the Five Eyes, the world has ever known.”

But not all of the Five Eyes group has taken the same approach to Huawei.

Australia has followed the United States’ lead and blocked Huawei from being a part of its 5G networks, with government saying that the involvement of a company “likely to be subject to extrajudicial directions from a foreign government presents too much of a risk”.

New Zealand’s second largest telecoms operator, Spark, announced last November that it intended to procure technology from the company for its 5G infrastructure last November. The order was blocked by the Government Communications Security Bureau as a security risk. Spark continues to pursue purchases from Huawei with changes to the order, but has added Samsung Electronics and Nokia to the list of preferred vendors.

The Canadian government is yet to announce its own verdict on Huawei. But it is caught up in another aspect of controversies surrounding Huawei with the arrest of its chief financial officer, Meng Wanzhou, the daughter of Ren Zhengfei, the company’s founder, on a US extradition request involving alleged business dealings with Iran.

The arrest led to furious protests from Beijing followed by the detention of two Canadians on unspecified allegations that they threatened Chinese national security, and then blocking of Canadian exports like canola, soybeans and pork.

The desperate need for post-Brexit trade, it has been claimed, is one key reason why the British government did not want to annoy Beijing over Huawei. The same need has led to the UK breaking ranks with its western partners to join China’s highly contentious belt and road programme.

Trade has also been dangled by Trump as a reward for the UK as he pressed for a hard Brexit. And the risk to that trade deal has been subsequently used as a threat by the US in its efforts to block Huawei.

A letter signed by Republican senators John Cornyn, Marco Rubio and Tom Cotton made an explicit link between the company and a trade agreement, saying: “This letter represents a genuine plea from one ally to another. We do not want to feed post-Brexit anxieties by threatening a potential US-UK free trade agreement when it comes to congress for approval ... Nor would we want to have to review US-UK intelligence-sharing.”

But it is also the issue of trade, along with Trump’s unpredictability, which is an argument for the British government sticking to its position on Huawei.

The company’s equipment is so heavily enmeshed in the UK’s telecommunications network that it will cost billions of pounds to strip it out. Trump, while decrying the dangers of Huawei, has also said he would reconsider the American campaign against the company as part of a trade deal with China.

As Ian Bond, director of foreign policy at the Centre for European Reform, observes: “There is a fear that if you take what potentially are quite expensive decisions with regards to 5G because the Americans have told you that they are a security problem, and then President Trump gets a trade deal with China and suddenly Huawei is all OK again, then you’ll feel like the earth has moved under your feet.”