The U.S. federal government is scrambling to come up with ideas that could throw Huawei off balance and gain a more robust position in 5G technology. It's even considering an overhaul of America's existing tech and telecommunications modus operandi. The Wall Street Journal reports officials in the Trump administration have been consulting telecommunication experts in order to find out how the country can beat its Chinese competition, even if it means giving tax breaks to major corporations that don't exactly need them.
One of the leading ideas, reportedly, is to incentivize and enable Cisco to acquire Ericsson or Nokia, two of Huawei's only sizeable rivals in the network infrastructure space. Among those floating the idea is Attorney General William Barr who has expressed interest in the possibility of centralized ownership of European telecommunications firms — be it private or public — in order to create a "more formidable competitor and eliminate concerns over its staying power."
Some have even suggested a "government-supported consortium" that would financially invest in the latter two companies. Yet another idea involves giving Ericsson and Nokia tax breaks and bolstering efforts to build "open" network technology so that more startups can provide 5G innovation.
Were it not for the daily lunacy we've become accustomed to from the Oval Office we'd be astounded to see the champions of free speech and market independence ditching those principles because they don't align with particular ambitions. You'd think the U.S. government attempting to influence a business's acquisition decisions would be seen as over-reaching and interfering but the current administration will, of course, brush off any criticism under the guise of "patriotism" and "a defense of liberty."
Huawei as Goliath — Trump's hostility toward Chinese trade, and Huawei in particular, is well-documented and evinced by the haphazard trade blacklist that even the American tech industry finds counterintuitive. With the spread of COVID-19, the administration appears intent on doubling down on its plans to apply additional pressure to Chinese electronics giant Huawei.
Huawei, meanwhile, continues to enjoy a dominant position. Outside the U.S. and some European states, it continues to flourish, much to Trump's chagrin. The administration claims Huawei has close ties to China's ruling party, and that the it builds backdoors into its hardware. A paper circulating in the White House and obtained by The Wall Street Journal has directly warned the federal administration to this effect:
For the first time in modern history, the United States has not been the leader in an emerging wave of critical technology.
Clearly, a panicked White House is brainstorming, and no idea is too wild. Cisco, for its part, has shown little interest in buying either Ericsson or Nokia. But with enough carrots, it may yet reconsider its position.