US warns Germany that using Huawei tech will come at a cost

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Washington (CNN)The US has underscored to Germany its threat to limit intelligence sharing with countries that use Chinese tech giant Huawei to build their 5G communications networks.

US Ambassador to Germany Richard Grenell sent a letter to the German government last week threatening to curtail German access to US intelligence if Berlin decides to issue contracts to Huawei, according to a US official familiar with the matter.

“The Federal Minister for Economic Affairs and Energy has indeed received a letter; there is no comment on its content from their side. There will be a quick reply,” said Matthias Wehler, spokesperson at the German embassy in DC. Germany announced March 7 that it wouldn’t ban any company from bidding on 5G contracts.

The letter, which was first reported by the Wall Street Journal, echoes a steady drumbeat of warnings by top US officials, including Vice President Mike Pence, who flagged Huawei’s alleged connections to Chinese intelligence and its ability to compromise national security by selling equipment with “backdoors” that could allow for unauthorized surveillance.

A potent irritant

CNN reported Monday that even as major US wireless carriers and the federal government shun Huawei over national security concerns, its technology is widely deployed by a number of small, federally-subsidized carriers that buy cheaper Chinese-made hardware to place atop their cell towers — in some cases providing exclusive coverage to rural areas close to US military bases.

As the US lobbies against Huawei, now the world’s largest telecommunications equipment manufacturer, the issue is straining US ties with some allies and is becoming a potent irritant in a US-China relationship already strained by trade friction.

China and Huawei have vigorously pushed back on the US charges and the telecom giant has filed suit against the US over the 2019 National Defense Authorization Act, which bans US federal agencies from buying Huawei products.

The 5G network is the next generation of wireless networks that promises to be 100 times faster and more reliable than current technology. It is a market that will be worth billions, as 5G will require compatible new phones and communications equipment.

Analysts and industry executives say Huawei has already built up such a strong lead in 5G technology that it’s practically irreplaceable for many wireless carriers. And mobile operators around the world have said the US campaign is complicating their efforts to upgrade their networks.

Germany’s March 7 announcement that it will not bar any companies from bidding to build the country’s 5G networks follows a similar decision by the United Kingdom. Both countries argue they can mitigate any risks and their decisions could make it harder for Washington to convince smaller countries to follow suit.

The State Department has not replied to request for comment about Grenell’s letter, but a National Security Council spokesperson outlined how Huawei’s 5G networks could pose a constantly evolving and shifting threat.

“Because 5G networks are largely software-defined, updates pushed to the network by the manufacturer can radically change how they operate,” Garrett Marquis, a spokesman for the National Security Council, told CNN. “The 5G networks our allies buy won’t be the networks that they eventually operate, as the software could be changed on a moment-to-moment basis by the manufacturer.”

‘Every place I go’

The public US pressure campaign on allies to reject Huawei follows the Trump administration’s request for Canada to arrest Huawei’s deputy chairwoman Meng Wangzhou for Iran sanctions violations.

The US has pushed for a ban on Huawei technology with the UK, Australia, Poland, the European Union, the Philippines and a slew of other countries. Security concerns have led Australia to completely ban the company’s technology and New Zealand has moved to partially restrict it.

In February, Secretary of State Mike Pompeo made the costs of adopting Huawei technology explicit to European colleagues.

Speaking in Hungary, the top US diplomat said that if allies choose Huawei equipment and it “is co-located where we have important American systems, it makes it more difficult for us to partner alongside them.”

In March, he fleshed that out, telling students in Iowa that “every place that I go” he encounters “countries that are considering putting Huawei technology into their government infrastructure.”

Noting that the company is state-owned and has “deep connections” to intelligence services — its founder was an engineer with the People’s Liberation Army — Pompeo said there’s a real risk “that the Chinese will use this for purposes that aren’t commercial, that aren’t for private gain, but rather for the state’s benefit. And it’s a risk I think these countries ought to very, very carefully consider before they move forward.”

Earlier this year the German government discussed the need to ensure security if Huawei was used. Chancellor Angela Merkel said they were trying to make sure that the company would not hand over all of its information to the Chinese government.

“We need to talk to China to ensure that companies do not simply give up all data that is used to the Chinese state,” Merkel said. She added that “safeguards” were needed to protect data.

Huawei’s founder, Ren Zhengfei, struck a defiant tone in the face of US attempts to curb his company’s international reach and prosecute his daughter. “There’s no way the US can crush us,” Ren said in a BBC interview that aired Tuesday. “The world needs Huawei because we are more advanced.”

CORRECTION: This story has been corrected to reflect that Huawei has filed a lawsuit against the US over the 2019 National Defense Authorization Act.

CNN’s Ben Westcott, Sherisse Pham, Alex Marquardt and Atika Shubert contributed to this report

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