By DealBook, New York Times
Bill Barr’s striking plan to counter Huawei
President Trump has made it very clear that he is worried about Huawei’s leading role in 5G wireless technology. Now his attorney general, Bill Barr, has offered a radical solution: having the U.S. invest in the Chinese company’s European counterparts.
The U.S. doesn’t have a homegrown competitor to Huawei, Mr. Barr noted in a speech yesterday. The only viable rivals are Ericsson of Sweden and Nokia of Finland.
“Our economic future is at stake,” Mr. Barr said. “The risk of losing the 5G struggle with China should vastly outweigh other considerations.”
So he has an idea:
• “Some propose that these concerns could be met by the United States aligning itself with Nokia and/or Ericsson 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 more formidable competitor and eliminate concerns over its staying power,” Mr. Barr adds. “We and our closest allies certainly need to be actively considering this approach.”
• The idea of the Trump administration buying a major telecom is a curious proposal from an administration that is currently decrying the rise of “socialism.”
• But watch this space. It wouldn’t be a surprise if an American telecom or a group of private equity firms bid for Nokia or Ericsson — with some kind of special subsidy or tax break provided by the White House.