LONDON -- In a reversal that will anger China, the U.K. government decided on Tuesday to phase out the use of Huawei Technologies' equipment in its 5G infrastructure after having just agreed to allow it early this year.
Under pressure from Washington and a growing number of ruling Conservative Party lawmakers to drop the Chinese telecoms giant, the move puts Britain in the U.S.-led camp that is trying to decouple from the world's second-largest economy.
The U.K. government announced it intends to ban the purchase of new Huawei 5G equipment as of Dec. 31 this year, and remove all Huawei devices from the country's 5G networks by 2027.
Digital and Culture Secretary Oliver Dowden told parliament that the move would mean significant costs and slow the rollout of 5G. He explained it would create a cumulative delay of two to three years, with costs of up to 2 billion pounds ($2.5 billion). U.S. sanctions were considered "a significant, material change" so severe in cutting off Huawei's hardware supply chain that the security of the company's future equipment could no longer be guaranteed.
"This has not been an easy decision, but it is the right one for the U.K.'s telecoms networks, for our national security and our economy," Dowden said.
Shortly after Dowden made his remarks, a Huawei U.K. spokesperson issued a statement calling it a "disappointing decision."
"It threatens to move Britain into the digital slow lane, push up bills and deepen the digital divide," the Huawei representative said. "Instead of 'leveling up' the government is leveling down and we urge them to reconsider. We remain confident that the new U.S. restrictions would not have affected the resilience or security of the products we supply to the U.K."
The statement also lamented that Huawei's future in the U.K. had become "politicized" and stressed that "this is about U.S. trade policy and not security."
The government's decision followed a National Cyber Security Centre review into the impact of new U.S. sanctions against Huawei. That appraisal came after a decision in January to allow the company -- categorized as a "high risk vendor" in the U.K. -- a limited role in building the network.
"We cannot put Huawei into the 5G system," Iain Duncan Smith, a long-standing member of parliament and former Tory party leader, told the Nikkei Asian Review. "We need to have a process to try and reduce our dependency on China dramatically over the next few years."
Tensions between London and Beijing have been rising in recent months.
The U.K., which has suffered the most coronavirus deaths in Europe, has seen growing skepticism toward China's initial handling of the outbreak. Britain has also criticized China's imposition of a national security law on Hong Kong, saying it is a clear violation of the 1985 Sino-British joint declaration that promised a high degree of autonomy for its former colony after the 1997 handover.
The U.S. has been lobbying its allies to exclude the Chinese telecoms giant, citing national security issues. In the lead up to the U.K.'s initial January decision, Washington threatened to stop sharing intelligence with London if it used Huawei in its network.
But the U.K. is already relatively dependent on Huawei equipment embedded in its existing networks. Removing it entirely from all of the country's systems would be expensive and create a major delay in the rollout of the highly anticipated next generation 5G technology, which is considered a social and economic game changer.
BT, the U.K.'s biggest telecoms company, has said that even reducing its network's use of Huawei equipment to 35% of noncore elements -- in line with current policy -- would cost around 500 million pounds. BT chief executive Philip Jansen told BBC radio on Monday that it would take at least five years to completely extract Huawei from the 5G system, warning that going any faster could result in service outages.
Huawei had called on the U.K. government to delay a decision. In a July 8 Twitter post, the company's Vice President Victor Zhang said, "Now is not the time to be hasty in making such a crucial decision about us. It's too early to assess the long-term impact of the U.S. restrictions." The company insists it is privately owned and that its products are safe.
Tuesday's move will undoubtedly worsen U.K.-China relations at a time when Britain is looking to forge stronger economic ties outside of Europe following its departure from the European Union.
Liu Xiaoming, China's ambassador to the U.K., warned on July 6 that banning Huawei would send "a very bad message" to Chinese businesses. He warned that if Britain treats China as a "hostile country," it would "have to bear the consequences."
The U.K. has tried to navigate a course between the U.S. -- a traditional ally with which it has close connections in terms of language, culture and politics -- and rising economic power China. European countries are closely watching the fallout from Tuesday's move, which could now place them in a similar predicament and influence their decisions and policies regarding Huawei.