White House dismisses idea of ​​US purchase by Nokia and Ericsson to challenge Huawei

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WASHINGTON (Reuters) – U.S. Vice President Mike Pence on Friday and the White House's top economic adviser rejected an unusual suggestion by U.S. Attorney General William Barr that the United States consider taking control of two major foreign rivals to Huawei Technologies Co., based in China.

ARCHIVE PHOTO – US Vice President Mike Pence steps ahead of Senate Majority Leader Mitch McConnell for US President Donald Trump's State of the Union address for a joint session of the US Congress at the House of the US Capitol House in Washington, USA, on February 4, 2020. REUTERS / Leah Millis / SWIMMING POOL

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Barr, a former general counsel for Verizon Communications Inc, said on Thursday that the United States and its allies should consider a "controlling stake" in Nokia Finland and Ericsson Sweden to combat Huawei's dominance in the next generation. of 5G wireless technology.

White House economic advisor Larry Kudlow added on Friday that the United States was working closely with Nokia and Ericsson, saying the companies' equipment was essential to building the 5G infrastructure.

But he said that "the US government is not in the business of buying companies, whether domestic or foreign," adding that "there is nothing to prohibit American technology companies from acquiring them".

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Pence earlier in the day had suggested an alternative approach when asked by CNBC for its response.

"Great respect for Attorney General Barr, but we believe that the best way forward is what Ajit Pai has announced in recent days," said Pence, referring to the efforts of the Federal Communications Commission president to free up more spectrum for wireless use. 5G.

"This is the plan the president has endorsed and will carry out," said Pence, adding that the United States can expand 5G "using the power of the free market and American companies."

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The White House and representatives of Barr and Pai declined to comment.

Nokia shares closed up 4% on the New York Stock Exchange and Ericsson shares rose nearly 5.4% on Nasdaq. Both companies declined to comment.

Nokia and Ericsson have a combined market capitalization of around $ 53 billion and it is unclear what source of funds the US government could potentially use to take holdings in companies or whether foreign regulators would approve.

In a notable statement that underscores how much the United States is willing to go against Huawei, Barr unveiled proposals on Thursday "for the United States aligning itself with Nokia and / or Ericsson".

Barr said the alignment could take place "through American ownership of a controlling stake, directly or through a consortium of American companies and private allies".

Barr said that "putting our big market and financial muscles behind one or both companies would make it a much more formidable competitor and eliminate concerns about its staying power or staying power."

"We and our closest allies certainly need to actively consider this approach," he added.

Reporting by David Shepardson and Jeff Mason; Editing by Richard Chang

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