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Boris Johnson Set to Test Bond With Trump Over Huawei’s Role in UK

Jessica Shankleman
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Boris Johnson Set to Test Bond With Trump Over Huawei’s Role in UK

(Bloomberg) -- U.K. Prime Minister Boris Johnson will put his friendship with President Trump to the test this week as he is poised to allow Huawei Technologies Co. a role in the country’s fifth-generation wireless broadband networks.

In the week that the U.K. ends its 45-year relationship with the European Union, Johnson is expected to make a series of critical infrastructure decisions that could shape his premiership -- and the country -- for years to come.

The premier is preparing to give Huawei a role in developing 5G, despite calls from Trump to ban the Chinese firm over concerns that it could make the network vulnerable to spying in the future. Huawei has always denied posing a security risk. An announcement could come as early as Tuesday.

The Huawei decision is perilous for Johnson. If he bans the company, he risks failing to equip the U.K. with the technology Huawei is well placed to provide and betraying his pledge to voters to spread ultra-fast internet services across the country. If he allows Huawei to go ahead, he faces the potential loss of U.S. intelligence cooperation and an angry backlash from the White House at a time when he’s seeking a trade deal with Britain’s closest ally.

Trump Calls

Trump and Johnson discussed Huawei on Friday in a phone call following weeks of lobbying from the U.S. to try to persuade the U.K. to ban the Chinese company from 5G networks over security concerns.

Secretary of State Michael Pompeo added his voice to the public warnings from U.S. officials, ahead of a trip to Britain this week.

“The U.K. has a momentous decision ahead on 5G,” he said on Twitter. Pompeo endorsed the view of British Conservative lawmaker Tom Tugendhat that “only nations able to protect their data will be sovereign.”

One option Johnson is considering is imposing a market share cap on Huawei, in a bid to avoid over-reliance on the Chinese company, according to the Financial Times.

On Sunday, Brexit Secretary Stephen Barclay said he was confident the U.K. and U.S. would get a post-Brexit trade deal done despite the tensions over Huawei.

“The key issue in terms of the U.S. trade deal is the clear intent of the Trump administration to have a trade deal with the U.K.,” Barclay told the BBC’s Andrew Marr show. “They’ve been very clear in terms of how they prioritize that -- that they want to have that deal. So yeah, there’s issues in terms of 5G, but that is a U.K. decision.”

Railroad Blues

Johnson may also this week decide on whether to proceed with the controversial High Speed Two rail link from London to the north of England, whose costs have spiraled.

Barclay said his “gut feeling” was that HS2 would go ahead, as it would play a key part in delivering on Johnson’s pledge to level regional inequality.

Officials will announce plans this week to renationalize the troubled Northern Rail franchise which is operated by Arriva Plc, according to reports in British newspapers over the weekend.

As the U.K. prepares legally to leave the EU on Friday, the government will also take steps to relax visa rules for top scientists, while clamping down on low-skilled migration after Brexit.

Immigration was a key issue during the 2016 referendum and Johnson, who led the campaign to exit the bloc, is proposing a points-based system that prioritizes higher-skilled workers.

Cheap Labor

On Sunday, Home Secretary Priti Patel warned U.K. businesses they would have to change their approach to recruitment after Brexit. “They have been far too reliant on low skills and, quite frankly, cheap labor from the EU and we want to end that,” she told Sky’s Sophy Ridge show.

Patel said she would accept the findings of a report she commissioned by the Migration Advisory Committee, due to be published this week. The committee is reviewing a proposed 30,000-pound ($39,000) minimum salary threshold for migrant workers that has alarmed businesses.

An increase in anti-immigrant rhetoric since the Brexit vote has alarmed business executives used to decades of unfettered movement of staff between the U.K. and the continent.

Industries such as construction, hospitality and the National Health Service are especially at risk from a lack of skilled foreign workers.

To contact the reporter on this story: Jessica Shankleman in London at jshankleman@bloomberg.net

To contact the editors responsible for this story: Tim Ross at tross54@bloomberg.net, Tony Czuczka

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