This is an important win for the White House's efforts to international expansion, especially in Europe. In the face of U.S. pressure and threats—at one point, Secretary of State Mike Pompeo warned that a deal with Huawei endangered —British officials had argued that they could of allowing the Chinese telecom to build its 5G networks by keeping it out of the "core" and limiting it to 35 percent market share. These arguments gave cover to others who were on the fence about Huawei. If the United States' closest intelligence partner believed it could mitigate the risks, the thinking went in other European capitals, then perhaps we can also find a compromise that does not completely ban Huawei. That future no longer looks possible, and the pressure to keep Huawei out in Germany and France will grow.
Two factors seem to be behind the U-turn. First, U.S. sanctions on Huawei, and the issuance of the Foreign Produced Direct Product Rule in May 2020 by the in particular, changed the risk calculus. UK intelligence agencies that the sanctions would severely disrupt Huawei's supply chains and as a result it would be "extremely challenging to gain confidence in Huawei’s post-sanction equipment, and it may be impossible." Second, the COVID-19 crisis, the crackdown on Hong Kong, and other issues have led to a significant . In a recent poll, 83 percent of respondents said they distrusted China.
There is much work to be done. Transitioning away from Huawei will cost billions, and others, especially in the developing world, will not necessarily recreate the two factors driving British decision making. They are likely to find the economics of cheap, reliable Huawei products extremely attractive. The United States has begun to on the domestic side to encourage innovation and provide an to Chinese telecom manufacturers, though there remains political that slows the response. Still, after months of mixed messaging and seeming setbacks, the United States got what it wanted.