Economic statecraft by design and by default: The political economy of the 5G-Huawei bans in the United States, United Kingdom and Germany

Abstract

The ban of Huawei by the United States and European governments from their 5G infrastructure has been described in recent literature as economic statecraft. However, it remains under researched that in these ban decisions the domestic political and economic constellations differed. To address this gap, this study adopts an agency perspective and compares 5G Huawei policies in the United States, Germany and the United Kingdom. While in the United States the ban was unanimously supported by state actors and telecommunication companies and equipment manufacturers, in the United Kingdom and Germany telecommunication companies and (initially also) governments were opposing the ban. There, we also observe interests from governing parliamentarians across political parties representing cyber security interests prevail in the domestic policy making processes over political and economic actors representing economic interests. In line with recent works on the domestic politics of economic statecraft and adopting the method of structured, focused comparison our inductive, theory developing case study reveals that economic statecraft is a dyadic concept between ‘by default’ and ‘by design’. We show that economic statecraft occurs ‘by default’ in the manner that states’ and businesses’ interests align, it happens ‘by design’ in the manner that states’ and businesses’ interests diverge. We contribute to previous literature that theory building on economic statecraft should start before the notions of power and policy preferences by a closer inspection of the domestic interest constellations.