Key insights
- China threatens retaliation against the EU if Huawei equipment is banned, potentially escalating trade tensions. This could negatively impact European businesses and indirectly affect US equities through global economic uncertainty and supply chain disruptions in the technology sector. The situation warrants monitoring for further escalation and its impact on global trade relations.
Investing.com -- China has warned it will take countermeasures against the European Union if the bloc moves forward with a proposal to ban Huawei Technologies Co.’s equipment across Europe, according to a statement from China’s mission to the EU delivered at a meeting in Brussels on Wednesday.
The Chinese mission requested that the European Commission remove language from a proposal by Commission Executive Vice President Henna Virkkunen that would designate Chinese equipment as a cybersecurity concern and classify companies from China as high-risk suppliers.
Virkkunen is seeking methods to require EU member states to remove equipment from Huawei and ZTE Corp. from their telecommunications infrastructure. In January, she put forward mandatory measures under the Cybersecurity Act aimed at securing networks.
China’s mission stated that if the EU adopts the proposal, China will implement corresponding countermeasures against the EU and European businesses. The statement indicated that China could launch investigations into the EU or EU businesses and take reciprocal measures if the act forces European companies to phase out Chinese equipment.
Several European countries and the United Kingdom have already implemented restrictions on Huawei equipment in sensitive portions of their telecommunications networks, citing security concerns related to the company’s connections to China. In 2020, the commission issued voluntary guidelines in its 5G toolbox recommending that countries limit use of high-risk vendors.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.