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Why Germany Dropped Restrictions on Huawei: A Strategic Shift in 5G Policy
“In a world where technology is the backbone of economies, strategic decisions like Germany’s on Huawei are not just about politics—they’re about survival.”
Introduction
On the evening of April 9, 2025, under the gleaming glass dome of Berlin’s Charlottenburg Palace, cameras crowded the media area outside the German Bundestag. The three new ruling parties of Germany—the Christian Democratic Union (CDU), its Bavarian sister party the Christian Social Union (CSU), and the Social Democratic Party (SPD)—were set to announce their coalition agreement.
However, when the text was released, the focus wasn’t on power-sharing but on a single word removed from the document: Huawei. Previously, leaked drafts had included a clause restricting “components from trusted countries” in critical infrastructure. The final version deleted this phrase, marking a pivotal shift in Germany’s 5G policy.
This decision not only clears Huawei’s path in Germany but also signals a broader realignment in Europe’s approach to China amid global economic and geopolitical turbulence.
1. Internal Economic Necessity
Germany’s economy has relied on two pillars since the Merkel era: cheap Russian energy and China’s vast market and supply chains. These allowed German industries to thrive for over a decade.
However, the Russia-Ukraine war shattered the energy pillar, while industrial outflows and declining competitiveness hit the second. By 2024, Germany’s GDP shrank by 0.2%, marking its second consecutive year of contraction.
To revive its economy, Germany must deepen cooperation with China. Huawei, a leader in 5G and industrial automation, is critical for Germany’s Industry 4.0 ambitions. Blocking Huawei would hinder Germany’s access to cutting-edge technologies and delay its industrial modernization.
2. External Geopolitical Pressures
Friedrich Merz, Germany’s incoming Chancellor, is a staunch Atlanticist. His political lineage—grandfather a mayor, father a judge—and early ties to U.S. institutions shaped his pro-American stance. Merz has pledged stronger support for Ukraine, including supplying advanced weapons like the Taurus cruise missile and IRIS-T air defense systems that his predecessor avoided.
Yet, Merz’s alignment with the U.S. faces complications. Donald Trump’s aggressive tariffs and “America First” policies clash with Merz’s establishment-friendly approach. To avoid antagonizing both China and the U.S., Merz must balance cooperation with pragmatism.
As one analyst noted, “Even Merz can’t fight China, Russia, and the U.S. at once—no leader could.”
3. The Fall of the Greens and Germany’s Rightward Shift
The 2021 “traffic light coalition” (SPD-Greens-FDP) included the Greens, who held key ministries like Foreign Affairs and Economics. Under their influence, Germany adopted hostile policies toward China, including attempts to exclude Huawei.
However, the Greens’ popularity collapsed by 2025 due to unpopular climate policies and economic mismanagement. The CDU-SPD coalition, now holding a majority, sidelined them.
Merz’s CDU has also shifted rightward to counter the far-right Alternative for Germany (AfD). By adopting stricter anti-immigration policies, Merz reclaimed voters disillusioned by Merkel’s refugee policies.
This rightward turn aligns with historical trends: pragmatic conservatives like Nixon (U.S.), de Gaulle (France), and Heath (U.K.) often achieved breakthroughs with China.
4. Breaking the “Firewall”: CDU’s Gamble with the AfD
The CDU’s next move could reshape Europe’s political landscape: normalizing the AfD. In March 2025, CDU heavyweight Jens Spahn argued that the AfD—now the second-largest party with 20% support—should be treated like any opposition group.
Another CDU leader, Johann Wadephul, warned that isolating the AfD would only amplify its “victim narrative”.
If Merz dismantles the political “firewall” against the AfD, it could empower far-right parties across Europe, mirroring Hungary’s Viktor Orbán or Slovakia’s Robert Fico. This shift would likely accelerate EU-China cooperation beyond 5G, as right-wing leaders prioritize economic pragmatism over ideological clashes.
5. Ripple Effects in Europe
Germany’s decision to drop Huawei restrictions sets a precedent. The U.K., Denmark, and Sweden are already reconsidering bans on Huawei’s 5G equipment. Analysts predict that Huawei’s 6G technology may soon gain acceptance in Europe.
The economic rationale is clear:
- Replacing Huawei’s equipment would cost Germany’s telecom giants €4 billion and delay network upgrades by 5–6 years.
- Huawei’s 5G base stations are 20–30% cheaper and more energy-efficient than Ericsson or Nokia’s.
- After a 5-year security review, Germany found no evidence of Huawei posing risks—contrary to U.S. claims.
6. U.S.-EU Frictions and Huawei’s Resilience
Trump’s tariffs and tech decoupling have backfired. Huawei’s breakthroughs—like the Kirin 5G chip and HarmonyOS—have reduced reliance on U.S. components. Meanwhile, U.S. industries face bottlenecks due to China’s rare-earth controls and semiconductor shortages.
Europe’s defiance highlights fading U.S. influence. As the Economic Weekly noted, “America’s declining leverage has given Europe room to act in its own interest.”
7. Challenges Ahead for China
While Germany’s policy shift is a win, challenges remain:
- The EU’s “systemic rivalry” framework still labels China a competitor.
- U.S. pressure could resurface if Trump escalates tariffs or sanctions.
- Huawei must continue proving its technology’s security and cost-effectiveness in Europe.
Conclusion
Germany’s Huawei decision reflects a world where economic necessity trumps ideology. For Europe, embracing Huawei’s 5G is not just about connectivity—it’s a strategic choice to stabilize economies and navigate U.S.-China tensions.
As Merz’s Germany pivots, the ripple effects will shape global tech politics for years to come.
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