Brazilian President Jair Bolsonaro, who had opposed Huawei 5G due to US pressure, has backtracked on his opposition to Huawei's bid. Credit: Handout.

Financial costs in the range of billions of dollars and the exit of US President Donald Trump are forcing President Jair Bolsonaro, who had opposed Huawei on unproven grounds, to backtrack on his opposition to Huawei’s bid, Reuters reported, citing local newspaper Estado de S. Paulo.

Brazil will not seek to bar the Chinese telecommunication giant from its 2021 5G network auctions in June, the Brazilian paper reported.

Chinese analysts said the reported move is significant as it makes Brazil the first country to stand up to the US on Huawei after Trump’s election loss.

Fu Liang, a Beijing-based telecom industry expert, told the Global Times on Sunday that as Trump leaves the White House and the US failed in its promise to provide badly needed vaccines to Brazil, which has been hit hard by the virus, Brazil’s committed pro-US stance naturally did not materialize.

Vice President Hamilton Mourao told Estado de S. Paulo that any company that takes part in the auction will be subject to the country’s data protection laws and must respect Brazil’s sovereignty.

One of the arguments put forth by the current US administration is that Huawei has links to the Communist Party of China and therefore data won’t be safe if Huawei is allowed into 5G networks, reported.

However, no proof has ever been released publicly, proving this allegation. The Five Eyes group, which monitors the world’s communication traffic, is accusing Huawei of potentially doing the same.

And while Trump’s departure may have saved Huawei’s prospects in Brazil, it has likely come too late for the company in other countries like Poland and the UK which have already moved to ban Huawei from their 5G networks and remove it where it has already been installed.

Brazil has the second-highest Covid-19 death toll after the US, and the government is being criticized for a slow vaccination process.  

It’s reported move to allow Huawei to bid is a setback for the Trump administration’s so-called “Clean Network” scheme, for which it painstakingly lobbied around the world, coercing and luring countries to shun Chinese high-tech companies.

“Without the stick-and-carrot approach of the Trump administration, more countries will fall back to a neutral stance after they ventured to move against Huawei,” Fu said. 

Fu predicted that more countries could take a similar approach as Brazil, which is boldly standing up for its sovereignty. As for the so-called “Clean Network” scheme, it will likely be changed under Joe Biden, according to Fu.

It could, for example, also bolster Ericsson CEO Börje Ekholm’s bid to overturn Sweden’s decision on banning Huawei.

“China accounts for eight percent of our revenue. For us it has been a strategically important issue to be present in China,” Ekholm told local media.

According to Canada’s Globe and Mail, that nation’s military is urging Prime Minister Justin Trudeau to ban Huawei from its wireless networks, over security concerns.

Trudeau, considered long on good looks but short on backbone, is expected to cave to Five Eyes pressure.

An outright ban could compel companies like BCE and Telus to rip out existing Huawei equipment to accommodate a new supplier, an expensive proposition, the Globe and Mail reported.

Despite the crackdown by the US, Huawei still held its No.1 position as a global telecom gear provider with a 30% market share for the first nine months of 2020, per data from market firm Dell’Oro.

Meanwhile, the development in Brazil follows news that the Trump administration has inflicted even more damage on Chinese businesses — including smartphone maker Xiaomi — with just days to go before President-elect Biden takes office, CNN reported.

The US Defense Department added nine Chinese firms, including Xiaomi, to a list of companies the agency claims are owned or controlled by China’s military. Businesses on the list are subject to harsh restrictions, including a ban on American investment.

The addition is worrisome news for Xiaomi, which recently surpassed Apple to become the world’s third largest smartphone maker.