U.S. offers to finance 5G equipment from Huawei’s competitors for Brazil

In a significant development, the U.S. government has stepped up efforts to keep China’s Huawei Technologies at bay from Brazil’s 5G market, with Washington offering Brasilia offers to finance the purchase of 5G telecom equipment from Huawei’s competitors.

During a visit to Brasilia, officials of the U.S. International Development Finance Corporation (DFC), the National Security Council and the the U.S. EXIM bank stated, funding was available to buy equipment from other companies.

The U.S. delegation was lead by National Security adviser Robert O’Brien, who met with Bolsonaro before they attended the signing of an EXIM bank financing agreement that identifies areas of business cooperation that includes 5G telecoms.

Meanwhile in Washington, top U.S. officials have briefed Brazil on the risks associated with Chinese investments in Brazil as well as Beijing’s moves to expand its influence in the country by using Huawei as a vehicle.

In a statement, U.S. Trade Representative Robert Lighthizer said, trade agreements signed with Brazil will pave the way for further negotiations on sugar, steel, and ethanol and promote greater U.S. investment with Washington moving to provide a counter-weight to China’s expansion in the region.

“I would say clearly there is a China element … in everything that all of us do,” said Lighthizer at an event hosted by the U.S. Chamber of Commerce.

He went on to add, “China has made a very significant move in Brazil. They’re Brazil’s biggest trading partner, so it’s something that we’re concerned about.”

Lighthizer’s remarks were part of a full-court press.

Mirroring Washington’s message to carefully monitor Chinese investment in the country, White House economic adviser Larry Kudlow urged Brazilian President Jair Bolsonaro and other Brazilian officials to closely monitor Chinese investments and advanced technologies.

“We have encouraged Brazil .. to try to work together to make sure that we watch China carefully with respect to all manner of technology and telephoning and 5G,” said Kudlow. “We have taken actions here in the States; we continue to move, and it is my great hope that Brazil will move with us,” he added. “We hope that Brazil will also keep a careful, critical eye on Chinese investment.”

Brazil is planning to auction 5G frequencies in 2021.

“The U.S. concern is how they use the data, how they use the technology for state benefit, not for the individuals who use that the technology,” said Joshua Hodges, senior director for Western Hemisphere affairs on the NSC.

DFC Managing Director Sabrina Teichman said the agency has both equity financing and debt financing available for Brazilian companies looking to acquire new technology.

“We are looking forward to supporting the Brazilian telecom sector,” she said to reporters.

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