UK plays down con­cerns over Huawei and US tax

Muscat Daily - - BUSINESS -

Lon­don, UK - UK of­fi­cials tried to ease con­cerns over Britain’s fu­ture re­la­tion­ship with the US, af­ter the two coun­tries clashed over a pos­si­ble new dig­i­tal tax and fu­ture deal­ings with Chi­nese firm Huawei Tech­nolo­gies Co.

Prime Min­is­ter Boris John­son’s gov­ern­ment is this week poised to al­low Huawei to take a role in de­vel­op­ing its fifth gen­er­a­tion wire­less broad­band net­works, de­spite calls from US Pres­i­dent Don­ald Trump to ban the Chi­nese firm on se­cu­rity grounds. Sep­a­rately, Trump is threat­en­ing puni­tive tar­iffs against the UK if it goes ahead with a dig­i­tal ser­vices tax due to start in April that he re­gards as dis­crim­i­nat­ing against Amer­i­can busi­nesses.

Britain is set to exit the Eu­ro­pean Union (EU) on Jan­uary 31, and plans to start ne­go­ti­at­ing a new trade deal with the EU in par­al­lel with the US. On Sun­day, Brexit Sec­re­tary Stephen Bar­clay said he was con­fi­dent the UK and US would get a deal done de­spite the ten­sions over Huawei and the new dig­i­tal tax.

“The key is­sue in terms of the US trade deal is the clear in­tent of the Trump ad­min­is­tra­tion to have a trade deal with the UK,”

Bar­clay told 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 UK de­ci­sion.”

Trump and John­son dis­cussed the is­sue of Huawei on Fri­day in a phone call fol­low­ing weeks of lob­by­ing from the US to try to per­suade the UK to ex­clude the Chi­nese com­pany from 5G net­works over con­cerns the tech­nol­ogy could fa­cil­i­tate spy­ing in fu­ture. Huawei has al­ways de­nied that it poses any se­cu­rity risk.

On Sun­day, Home Sec­re­tary Priti Pa­tel also said the UK would re­main part of the Five Eyes in­tel­li­gence-sharing net­work - com­pris­ing Aus­tralia, the US, UK, New Zealand and Canada - re­gard­less of its de­ci­sion on Huawei.

“We work very closely across our Five Eyes part­ners, our Amer­i­can friends and al­lies who are part of that as well and we share a lot of in­for­ma­tion and we all share our own views, mostly facts, data and in­tel­li­gence and that co­op­er­a­tion and that way of work­ing will con­tinue,” she told Sky’s So­phy Ridge show.

On Satur­day, US Trea­sury Sec­re­tary Steve Mnuchin said he was fo­cused on get­ting a trade deal be­tween the US and UK this year. Ear­lier in the day he met with UK Chan­cel­lor of the Ex­che­quer Sa­jid Javid in Lon­don to dis­cuss the tax.

Javid has said the UK still plans to go ahead with a tax on dig­i­tal ser­vices in April and with­draw its na­tional tax once a global so­lu­tion has been found. One op­tion could be for the UK to post­pone the tax as France did when faced with sim­i­lar threats.

Stephen Bar­clay

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