Choose between us and China, US secretary of state Pompeo tells the UK

Thu 11 Jun 2020
Posted by: William Barns-Graham
Trade News

us china trade

The UK is being asked to choose between the US and China, in one of many agonising economic and diplomatic dilemmas it faces as the country emerges as an independent trading nation post-Brexit.

US Secretary of State Mike Pompeo said in a statement on Tuesday (9 June) that the US is “ready to assist our friend in the UK with any needs they have” when commenting on the “Chinese Communist Party’s coercive bullying tactics”.

He mentioned building nuclear power plants and the development of 5G infrastructure as areas the US could support – projects for which the UK has previously sought Chinese investment and assistance.

The US has been pressuring the UK not to go ahead with its plans to allow Chinese tech giant Huawei to play a major role in the development of its 5G networks.

Tensions

Pompeo’s statement comes amid escalating tensions between China and the US.

The US has blamed China for the spread of the coronavirus pandemic and has led the west’s condemnation of China for allegedly undermining of the ‘one country, two systems’ constitutional framework in Hong Kong.

“The United States stands with our allies and partners against the Chinese Communist Party’s (CCP) coercive bullying tactics,” he said.

‘Economic over-reliance’

Following British bank HSBC’s backing of the legislation passed in Hong Kong to ban protests in the city – a law which has been perceived as an example of Chinese overinfluence – Pompeo said:

“Beijing has reportedly threatened to punish British bank HSBC and to break commitments to build nuclear power plants in the United Kingdom unless London allows Huawei to build its 5G network.

“Beijing’s aggressive behaviour shows why countries should avoid economic over-reliance on China and should guard their critical infrastructure from CCP influence.”

UK’s Huawei dilemma

In January the UK agreed a deal giving Huawei a significant role in the development of its 5G infrastructure but has since launched a review which could give it an opportunity to U-turn on this deal, the FT reported.

However, Vodafone this week told the FT that cutting Huawei out would undermine the UK’s desire to be a global leader in 5G.

US talks

The UK began trade talks with the US last month in what is viewed by some as a pivotal potential deal for the UK post Brexit.

The UK’s future relationship with China is likely to be a sticking point in the talks, with the US reportedly looking to insert a clause that would allow it to “retreat from parts of the deal if Britain reaches a trade agreement with another country that the US did not approve”.

Other potential hurdles for a US-UK deal include market access to the NHS and agricultural and food standards.

Last week it was reported that the UK could impose higher tariffs on foods produced to lower welfare standards, such as hormone-fed beef and chlorinated chicken, in order to protect British farming.