The US is stepping up pressure on Europe to ditch Huawei

US Secretary of State Mike Pompeo warned European countries on Monday that using technology from Huawei could hurt their relationship with the United States.

Speaking in Hungary, the first stop in a five-nation European tour, Pompeo said the United States has an obligation to alert other governments to the risks of building networks with equipment from the Chinese telecommunications giant.

“What’s imperative is that we share with them the things we know about the risks that Huawei’s presence in their networks presents,” he said. “Actual risks to their own people, to the loss of privacy protections for their own people, the risk that China will use this data in a way that is not in the best interest of Hungary.”

If countries use Huawei equipment, “it makes it more difficult for us to partner alongside them,” Pompeo said.

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It’s the latest effort by the US government to pressure countries around the world to keep Huawei out of the next generation of wireless networks, known as 5G, because of security concerns. The US campaign against one of China’s leading companies has added to tensions between the two countries over the future of technology.

The Chinese government on Tuesday criticized Pompeo’s remarks, accusing Washington of attempting to “sow discord between China and other countries.”

The United States is “unscrupulously fabricating groundless accusations” and cracking down on the development of Chinese companies, Foreign Ministry spokeswoman Hua Chunying said at a regular media briefing. “These actions are unfair and immoral.”

The US government has long been suspicious that Beijing could use Huawei equipment for spying but hasn’t provided public evidence to support those concerns. There is particular concern about the security of 5G because it will be used to carry vast amounts of data that can connect robots, autonomous vehicles and other potentially sensitive devices.

Huawei, which is also one of the world’s top smartphone makers, has repeatedly denied that its products pose a national security risk. It also maintains that it is a privately owned company with no ties to the Chinese government.

“We would encourage all governments to take an objective look at the evidence and maintain an open, engaged approach to 5G,” William Wu, the CEO of Huawei Technologies Hungary, said in a statement. “Excluding one supplier from technological developments in cyber security will damage technical and economic progress and harm competition.”

Uncertainty over Huawei across Europe

Huawei is largely shut out of the US market, but the company does significant business in Europe where it has some 40% of the telecommunications equipment market.

Washington is trying to loosen that grip.

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Global mobile carrier Vodafone (VOD) said late last month that it was suspending the deployment of Huawei equipment in core networks in Europe, given the political uncertainty surrounding the Chinese firm.

In the United Kingdom, Huawei is spending $2 billion on efforts to address government agencies’ security concerns. Telecommunications operator BT (BT) said it would not buy Huawei equipment for the core of its 5G network but would continue to use it for other parts, such as mobile base stations.

German Chancellor Angela Merkel said last week that “there are big discussions about Huawei” in Germany as the country develops 5G networks. “We need to talk to China to ensure that companies do not simply give up all data that is used to the Chinese state,” she said, adding that “safeguards” were needed to protect data.

What will Canada do?

Two close US allies outside Europe have already distanced themselves from Huawei. Australia and New Zealand restricted the company last year from providing equipment for 5G networks.

BEIJING, CHINA - DECEMBER 04: China and Canada flag is displayed in front of the Forbidden City on December 4, 2017 in Beijing, China. At the invitation of Premier Li Keqiang of the State Council of China, Prime Minister of Canada, Justin Trudeau will pay an official visit to China from Dec 3 to 7. (Photo by Lintao Zhang/Getty Images)

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Huawei has pushed back against what it calls “irresponsible decisions” by some countries that it says were based on “ideological and geopolitical considerations” rather than legitimate concerns about technology.

Canada is considering similar measures to restrict Huawei even as it walks a geopolitical tightrope between Washington and Beijing. Canadian police detained Huawei Chief Financial Officer Meng Wanzhou in December on behalf of US authorities. Meng is the daughter of Huawei founder Ren Zhengfei.

Her arrest has severely strained relations between China and Canada.

The US Justice Department is seeking Meng’s extradition, accusing her and Huawei of bank fraud and violating US sanctions on Iran. Meng and Huawei have denied the charges.