Tariffs and moves against Huawei could make it harder for telecom-gear makers to buy supplies, hindering 5G growth in the U.S.
China-based Huawei is the world’s biggest telecom-equipment company and holds more patents for 5G standards than any other company. Photo: Andre M. Chang/Zuma Press By Stu Woo May 28, 2019 5:30 a.m. ET The Trump administration’s offensives aimed at frustrating the 5G ambitions of China and mobile-technology giant Huawei Technologies Co. might end up impeding America’s wireless ambitions, too.
In addition, the Trump administration’s new 25% tariffs on Chinese goods are already making it more expensive for Western companies with Chinese factories, including Silicon Valley’s Cisco Systems Inc., CSCO 0.33% to send products to the U.S. President Trump has said the U.S. must win the 5G race by becoming the first major nation to set up a wireless network using the new technology. U.S. officials say 5G, which promises to zip gobs of data around networks much faster than today’s systems do, will provide the infrastructure for futuristic commercial and military inventions: driverless cars, flying battlefield drones, automated factories and web-connected pacemakers.
If suppliers slow operations, the Western companies that also buy from such suppliers might face a components shortage. “It’s not like the suppliers can instantly swap customers,” said Mr. Nordström, the consultant and a former Ericsson AB executive. While U.S. officials consider the actions against Huawei a national-security matter, the U.S.-China trade feud is already making the American 5G rollout more expensive. Earlier this month, Washington raised from 10% to 25% tariffs on $200 billion worth of goods, including major telecom equipment.
Washington’s campaign might give China’s 5G rollout bigger challenges, the industry executives and analysts say. China’s three major state-owned telecom providers get at least 70% of their equipment from Huawei and ZTE, the executives said.
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