US Mulls Controlling Stake In Ericsson, Nokia To Counter Huawei

US Attorney General William Barr has suggested that the United States and its allies take a ‘controlling stake’ in Ericsson and Nokia to counter Huawei.

The left field suggestion came when Barr was making a speech at a conference on Chinese economic espionage, Reuters reported.

The suggestion is evidence of the increasingly isolated position of the United States which maintains that Huawei is a national security risk if its equipment is deployed in 5G networks. Earlier this week it was reported that high-level US officials will meet later this month to discuss further restrictions on tech exports to China and Huawei.

Controlling stake

The meeting will reportedly involve high-level officials, and comes after the US Commerce Department withdrew a rule that would have placed additional trade restrictions on Huawei, amidst opposition from the US Department of Defence and the US Treasury.

The meeting on 28 February is expected to include cabinet-level officials including Commerce Department Secretary Wilbur Ross, Defense Secretary Mark Esper and State Department Secretary Mike Pompeo.

The meeting aims to find the best approach for dealing with Huawei and the broader confrontation with China over technological dominance.

And now US Attorney General Barr said on Thursday the United States and its allies should consider taking a “controlling stake” in Finland’s Nokia and Sweden’s Ericsson to counter China-based Huawei’s dominance in 5G wireless technology.

Barr also said that there had been proposals to meet the concerns “by the United States aligning itself with Nokia and/or Ericsson.”

Barr said the alignment could take place “through American ownership of a controlling stake, either directly or through a consortium of private American and allied companies.”

“Putting our large market and financial muscle behind one or both of these firms would make it a far more formidable competitor and eliminate concerns over its staying power, or their staying power,” Barr was quoted as saying by Reuters.

“We and our closest allies certainly need to be actively considering this approach,” he added at the event hosted by Washington’s Center for Strategic and International Studies (CSIS).

Barr’s suggestion did not detail where the US would find the money to take controlling stakes in the two firms (which combined have market capitalisation of approximately $50 billion).

It is also unclear whether the US move would even be allowed by various regulatory bodies around the world.

Reuters reported that Ericsson had declined to comment.

Nokia meanwhile did not immediately comment.

Chinese espionage

At the same event where the US Attorney General made his astonishing statement, FBI Director Christopher Wray said Beijing was seeking to steal American technology by “any means necessary.”

Wray said the bureau currently had about 1,000 open investigations of Chinese technology theft, and it seems that the FBI has arrested 24 people last year in China-related cases and another 19 already in 2020.

Wray said the investigations spanned “just about every industry sector” and the threat needed to be addressed through action across the whole of the US government.

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