New Cold War.......

Trump’s war on Huawei splits Europe

In the new Cold War, Europe is being asked to take sides over China.

By LAURENS CERULUS

The Trump administration's global campaign against telecom giant Huawei is pitting Europe against itself over China.

In the midst of a ballooning U.S.-China trade conflict, Washington has spent the past few months pressing its EU allies via its ambassadors to take a stronger stance against Chinese telecom vendors such as Huawei and ZTE.

The American push, which continued Wednesday with public accusations by U.S. Secretary of State Mike Pompeo, is exposing fault-lines between U.S. allies in Europe as well as the so-called "Five Eyes" intelligence community — which have largely followed the U.S. lead — and others that resist the American pressure by stopping short of calling out Chinese tech.

It's another Cold War — this time over information technology.

In the first group there is the United Kingdom, which pushed Huawei to open up its products for constant government audits, and to a lesser extent allied countries like Belgium that are considering steps against Chinese vendors. Even the European Commission, which usually avoids stepping on national capitals' toes over security, waded into the debate last week when a top official declared that the EU "should be worried" about firms like Huawei.

Up until now, no intelligence service has published clear evidence that Huawei inserted "backdoors" for Chinese authorities to access the data that passes through its networks.

On the other side there is Germany, which wants proof from the United States that Huawei poses a security risk, as well as France, Portugal and a slew of central and eastern EU nations.

The increasingly divergent attitudes show how Donald Trump is forcing allies to take sides in a global dispute and measure their economic interests — often deeply embedded with the Chinese vendors — against the value of a security alliance with Washington.

"The message of the U.S. [on Chinese tech] is targeted in part at European governments," said Paul Triolo, head of the "geo-technology" practice at think tank Eurasia Group.

Part of that message has to do with pointing a finger at China. Pompeo did that on Wednesday when he accused the Chinese government of hacking the Marriott hotel chain and stealing the information of up to 500 million people. Top U.S. intelligence officials also testified to senators Wednesday that they sense an "awakening" among allies regarding how they deal with Chinese tech vendors.

"As we shift into 5G, it is important to communicate the risk," Christopher Krebs, a high-ranking cybersecurity official at the U.S. Department of Homeland Security, told senators.

The U.S. diplomatic campaign has so far managed to convince counterparts in Canada, Australia, Japan and New Zealand to restrict Huawei.

The United States' Five Eyes partners — the U.K., Canada, Australia and New Zealand — "have an increasing common understanding of these risks," Krebs said, adding that Washington is reaching out to other international allies on this as well.

Up until now, no intelligence service has published clear evidence that Huawei inserted "backdoors" for Chinese authorities to access the data that passes through its networks. Huawei itself vehemently denies it has ever helped any intelligence service with espionage requests. “We categorically reject any allegation that we might pose a security threat,” it said in a statement last week.

But the company faces long-standing suspicions that it's too close to Beijing's intelligence services — concerns that stem from U.S. and U.K. government reports. Fueling such worries is the opaqueness of the company's ownership structure. The company, which is privately held, was founded in 1987 by Ren Zhengfei, a former Chinese military officer, leading some to conclude that it has retained ties with the government.

The discussion over its position in Europe fits into a broader geopolitical shift, as Europe seeks ways to keep control over its technologies and industries under the banner of “strategic autonomy.” The Continent is also trying to relieve pressure on its once-dominant telecom equipment champions Ericsson and Nokia, which are feeling the heat from their Chinese competitors around the globe.

The U.S. diplomatic campaign has so far managed to convince counterparts in Canada, Australia, Japan and New Zealand to restrict Huawei.

The beef worsened last week when Canadian authorities arrested Huawei’s chief financial officer, Sabrina Meng, at the request of U.S. authorities.

They were set to ramp up the pressure in a coordinated release of indictments and statements this week slamming Beijing for continued aggression in cyberspace and for violating a 2015 agreement on cyber espionage activities, the Washington Post reported.

These moves add fuel to an escalating trade war between the United States and China. Trump previously used such judicial procedures as bargaining chips in his feud with Chinese counterparts over trade barriers and market access, and suggested Wednesday he could do the same with the Huawei case.

The U.S. indictments are aimed at sending a message to the European Union, analysts said.

“Huawei has a large market share,” a senior European diplomat said who asked not to be named due to the issue's sensitivity. “Some Europeans haven’t seen a reason to change that. But the U.S. is more geo-politically driven.”

Germany resists

Overall, Europe's response to concerns about Huawei has been: Show us proof, then we’ll consider the actions.

In critical markets such as Germany, France and the United Kingdom, authorities have charged security agencies with verifying telecom equipment. In the U.K., Huawei has a longstanding deal with the intelligence agency GCHQ to have its equipment audited at a center called "the Cell," in Banbury, a provincial town in southeast England, where cybersecurity experts check its code for backdoors.

But pressure on EU governments is rising by the week for more public criticism of Huawei.

Alex Younger, the U.K.’s foreign intelligence chief, issued a public warning when he told an audience at St Andrews University: "We need to decide the extent to which we are going to be comfortable with Chinese ownership of these technologies and these platforms in an environment where some of our allies have taken a quite definite position.” The U.K.’s main telecom operator BT also decided to phase out Huawei equipment from its core network, the Financial Times reported earlier this month.

At the EU level, officials are scrambling to come up with a policy response. An internal paper obtained by POLITICO previously showed the European Commission recognized the risks associated with giving foreign vendors control over telecom networks. The Commission also commissioned a study on “cyber-enabled theft of intellectual property” that references the same hacker groups targeted by the expected U.S. statements this week.

Belgium's Centre for Cybersecurity, which reports to Prime Minister Charles Michel, is advising the government about risks related to Huawei. It said it had “recently requested studies through national and international channels that [would] show that the use of Huawei technology comes with risk,” according to Miguel De Bruycker, head of the cybersecurity agency.

If Europe decides to side with the U.S. on Huawei, Germany would be the tipping point.

But Germany asserts that its security checks are sufficient and allows telecom operators to choose their vendors. The country's biggest telecom companies said this week they would continue to work with Huawei to roll out fifth-generation, or 5G, networks.

“Considering the near-term needs for extension and investment, Germany will hardly be able to afford to exclude high-performance suppliers," Deutsche Telekom said in a statement to POLITICO. Telefónica Deutschland and Vodafone echoed that statement.

Underscoring the friendly ties between German authorities and Huawei, the firm last month opened a center in Bonn called the Security Innovation Lab, where “a close and regular cooperation between the [German Federal Office for Information Security] and Huawei is planned” that would include “the verification of product safety,” the company said at the launch.

Arne Schönbohm, president of the Federal Office for Information Security (BSI), said in a statement that the lab "will allow further and deeper technical exchange between Huawei and BSI to address the future challenges of cyber security.”

Huawei last month tried to get German consumers on its side too, through an advertisement campaign that included quips referencing Berlin’s struggle to upgrade its telecom networks to 5G. The underlying message is that the country needs Huawei’s gear to make its transition to fifth-generation internet networks happen.

"What will cover more of Berlin,” one ad said, depicting an elderly lady holding a Maltese dog. “5G or dog poop?"