US Ambassador to Germany starts making intel sharing threats

Richard Grenell, the US Ambassador to Germany, has starting the intimidation game with his host nation over Huawei, hoping the same tactic used against the UK will reap better yields.

In a series of tweets through the weekend, Grenell made his position on Huawei very clear, aligning himself with the anti-China rhetoric lobby which is beginning to verge on xenophobic. The Ambassador has now reiterated the intelligence embargo which was promised to the UK should it offer Huawei opportunity to do business.

Perhaps one of the most ironic elements of this story is the phone call itself. President Donald Trump has reportedly refused to use encrypted phones, due to the inconvenience, so any conversation he has is completely unprotected.

Irrelevant of whether the concepts of irony gain traction in the US, Grenell is effectively declaring that he has been given permission to take a firm stance against Germany. Although there has been no official confirmation, Germany will most likely be offered an ultimatum; access US intelligence data or have Huawei equipment in the communications network.

Although most of the transatlantic-lobby has been directed towards the UK in recent months, thanks to the now-concluded Supply Chain Review, Germany is another influential voice in Europe which is yet to formalise its position on Huawei. The US might have lost the political battle in the UK, but it still has until the EU Summit in March to convince the Germans China is the enemy.

There might have been some noises that Germany would head the same direction as the UK, but Chancellor Angela Merkel has previously said Germany would not make a decision until the EU Summit in March. Like the UK, Germany has a valuable trading relationship with the US, but it also has one with China. There is also the ambitions of the wider European Union to consider, where Germany is one of the leading voices.

Looking at the relationship with China, Germany’s highly influential automotive sector will not want to lose out because of issues with the telecoms industry. In 2018, almost one-quarter of all cars sold in China were German. In the first nine months of 2019, BMW delivered more than 500,000 vehicles to China, its largest single market.

As it stands, the automotive industry in China is not in the greatest of positions, sales have slumped over the last 18 months, while the US/China trade war has impacted the ability for these automotive giants to source some parts. The conflict between the US and China is not good for the German automotive trade, and this is a very powerful organisation in the German economy.

Germany may not want to say no to Huawei and anger the Chinese, but then again it might not have to.

The US, and Secretary of State Mike Pompeo, had been very aggressive towards the UK in the weeks leading up to the conclusion of the Supply Chain Review. When the carrot didn’t work, promising a favourable trade agreement, the stick was favoured. The threat of an intelligence data embargo for security agencies was pushed towards the UK, like Grenell is doing today.

The issue that Grenell might face here is that the US didn’t follow through on that threat to the UK.

The conclusion of the Supply Chain Review saw a 35% limitation placed on the telcos for Huawei equipment in the different segments of the network. This has proven to be awkward for some, having to reconfigure deployment strategies, though it is far from the apocalypse scenario of an all-out ban which was being demanding by the US.

The UK defied the US, but the US is yet to cut off the UK from valuable intelligence data for security and enforcement agencies. Considering this outcome, some in Germany might not take the US threat as seriously as before.