The government had made a decision to allow Huawei equipment a restricted role within the UK’s new 5G infrastructure.
The decision to allow Huawei to play a limited role follows months of discussions about potential security risks.
Here is what that decision means in business, security and international politics according to Sky News correspondents.
Deborah Haynes, international affairs editor
The decision on 5G is a high-stakes diplomatic gamble by Boris Johnson, impacting Britain’s relationship with its closest ally, the United States, as well as its ties with what will soon be the world’s largest economy, China.
President Donald Trump and his top aides have lobbied Britain hard for the past 18 months to exclude Huawei completely from its future communications grid.
A last-ditch attempt to change British minds was launched a fortnight ago, with a US team dispatched to Downing Street armed with additional “technical” information, but to no avail.
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The Americans say they do not believe it is possible to allow the Chinese telecommunications giant to play any part in the UK network without taking on an unacceptable level of risk.
They warn that this concern is felt by Republicans and Democrats alike, meaning that Congress could choose to pass legislation to penalise any country that does engage with Huawei.
The underlying threat is that the UK’s decision could hamper the prized special relationship with Washington, which is founded on a uniquely close intelligence-sharing bond.
Mr Johnson’s decision to go against the demands of Mr Trump may also blow back in other areas, including the shape of a future trade deal between the two countries, particularly given how the US president places such importance on loyalty.
On the UK side, officials hope the PM’s good working relationship with Mr Trump and the strong bond between US and UK security officials will enable Britain and the United States to navigate this tricky disagreement without it causing permanent damage.
They will doubtless be waiting to see what the first Trump tweet says or how US Secretary of State Mike Pompeo acts when he arrives in London tomorrow.
Another diplomatic consideration is Britain’s relationship with China – an emerging super-power. Any decision that went against Huawei would have had a damaging impact on UK-Chinese trade ties, which would have been another consideration weight on officials’ minds.
One source said a decision to exclude Huawei would have set back UK-China trade talks by at least two years.
Paul Kelso, business correspondent
Huawei is a known quantity to British communications companies, and what they know they like.
The Chinese firm already provides some of the hardware that underpins the UK’s 3G & 4G networks used by BT, Vodafone and others.
As the market-leader in 5G, with kit that is cheaper than direct rivals Ericsson and Nokia and of good quality, UK companies are keen to be able to continue using it.
Any ban would be expensive, with a price to remove Huawei’s existing products from networks and an opportunity cost as the UK’s expansion into 5G stalled.
The technology offers myriad new applications and as an early adopter of a full network the UK would be well-placed to exploit the opportunities.
Delay, and others might get a head-start in the commercial race – something Huawei believes is the real motivation for US objections.
Alistair Bunkall, defence & security correspondent
It’s rare to hear the US and UK intelligence communities disagree so publicly about fundamental security issues, but there is a very obvious difference in opinion on Huawei.
GCHQ has been working with the Chinese telecoms firm for 10 years or so, through 2G, 3G and 4G, and believes the risks in 5G can be managed. The US is more suspicious.
The British believe they can separate Huawei from core areas of the network, therefore denying them access to sensitive data sharing.
But 5G uses what is known as “virtualised hardware”, meaning that software sits on top of one another in layers that are harder to separate. This is one reason for American doubt.
There is also the problem of supply: not only is Huawei reasonably cheap, and technically very good, but it is already embedded in early 5G development. Removing it and replacing it would be costly and there would be an economic impact.
And so we have a stand-off. For all the nauseating talk of a “special relationship”, there is a genuine closeness when it comes to security issues and the US gains as much from British intelligence as vice versa.
If the US reduces co-operation it would damage them too, and so the hope is that for all the pre-decision lobbying, the impact will be negligible once the dust settles.
Tom Cheshire, Asia correspondent
Huawei has always insisted it has nothing to do with the Chinese Communist Party. Its founder Ren Zhengfei told me the company would never install backdoors at the government’s request because that would “that would mean the death of Huawei”.
On the other hand, he cheerfully recited for me the Party oath he had sworn as a member: “Be ready at all times to sacrifice everything for the party and the people, and never betray the party.”
For the Chinese government, whether or not Huawei is a spying tool (and I don’t think evidence to prove this has been presented), the company is a crown jewel – a symbol of the country’s technological development as well as a way into foreign markets and infrastructure.
And it’s a business they go to lengths to defend. After Mr Ren’s daughter and Huawei’s CFO Meng Wanzhou was arrested in Canada, two Canadian citizens were detained in China.
They have been under arrest for more than a year now, now charged with espionage – a move critics have said is entirely political. And it has warned other countries about the economic consequences of not allowing Huawei into domestic networks.
The UK’s choice isn’t just about security but also its future economic relationship with China, and the investment that brings.
Cordelia Lynch, US correspondent
The United States along with a multitude of Conservative MPs have repeatedly warned the UK that Huawei is a national security risk.
They claim China could use its equipment for espionage. But this decision by the UK is an indication that the US campaign against the network is struggling as America’s allies open up their markets.
It is a highly consequential move by Boris Johnson and could lead to the US government curtailing the intelligence it shares with its closest ally. It will seriously test the special relationship.
The debate around Huawei may seem a distant one for voters, but from the Trump administration’s perspective it is an urgent foreign policy priority.
America is working on ways out of this struggle. One option is for them to provide Huawei’s competitors with subsidies or tax-breaks to get other tech companies on side.
The Trump administration is said to be hopeful Boris Johnson and Angela Merkel could still change their minds and ban Huawei. Merkel is certainly been lobbied by some of her colleagues to block the network.
But be in no-doubt, US/US relations just got very tricky. This is a hammer blow for America.
SOURCE : https://news.sky.com/story/what-does-the-huawei-decision-mean-11919915