Huawei and ZTE win 5G deals in Vietnam as US tariffs strain ties

Vietnam is taking on more 5G equipment from China’s Huawei and ZTE this year, and the new deals mark a shift in how the country works with Beijing. Seven people familiar with the matter told Reuters that the moves have already raised concern among Western officials.

Vietnam once held back from using Chinese tech in sensitive networks. But in recent months it has warmed to Chinese companies as relations with Beijing have steadied, while its ties with Washington have been strained by new US tariffs on Vietnamese goods.

Ericsson, Nokia, and Qualcomm remain key suppliers of Vietnam’s 5G core systems, even as interest in Huawei 5G deals grows among state-owned operators. Even so, Chinese firms have started to pick up smaller tenders with state-owned telecom operators, according to public procurement data that had not been reported before.

A group that includes Huawei won a $23 million deal for 5G equipment in April, shortly after the White House announced fresh tariffs on Vietnamese products. ZTE has secured at least two antenna contracts worth more than $20 million, with the latest signed last week. The first publicly confirmed agreement appeared in September, one month after the US tariffs went into effect.

Reuters could not confirm whether the tariffs influenced the timing of the Chinese companies’ wins, but the developments have raised alarms among Western officials, who see the issue as tied to broader security concerns.

For years, the US has treated the exclusion of Chinese firms from Vietnam’s digital systems—including undersea cables—as an important condition for working together on advanced technology. Huawei and ZTE are banned from US telecom networks on national security grounds, and several European countries, including Sweden, have similar restrictions.

Ericsson did not comment on the Chinese vendors, saying only that it was “fully committed to support its customers in Vietnam.”

Huawei, ZTE, Nokia, Qualcomm, the US and Chinese embassies in Vietnam, Sweden’s foreign ministry, and Vietnam’s tech ministry did not respond to requests for comment.

Shifting ties between Hanoi and Beijing

Vietnam, which maintains strategic independence and avoids formal alliances, has become a key area of competition among major powers. Its location and manufacturing base have turned it into a major production centre for companies such as Apple, Samsung, and Nike, all of which depend on both Chinese parts and Western consumers.

Nguyen Hung, a supply chain specialist at RMIT University Vietnam, said Vietnam had long followed “a wait-and-see approach” toward Chinese tech because of Western pressure. But, he added, “Vietnam has its own priorities,” and the new contracts may bring the country’s economy even closer to China.

The two governments have also moved forward on other sensitive projects, such as cross-border rail lines and special economic zones near China—ideas Hanoi once rejected over security concerns.

Tender records show that Huawei lost several bids for 5G equipment in Vietnam this year. Even so, the company has continued offering technical services and, in June, signed a 5G technology transfer deal with Viettel, the military-owned telecom operator, according to Vietnam’s defence ministry.

Viettel did not respond to Reuters. One person at the company said the main reason for using Chinese technology was cost. All sources requested anonymity because the information is not public.

Concerns raised in Western meetings

Diplomatic sources told Reuters that senior Western officials in Hanoi have discussed the Chinese contracts in at least two recent meetings. In one, a US official warned that using Chinese suppliers could undermine confidence in Vietnam’s networks and affect access to advanced US technology.

Another meeting this month looked at whether network areas that rely on Chinese equipment could be kept separate from the rest of the system to reduce the risk of data exposure, one source said.

But Innocenzo Genna, a telecommunications lawyer, said that vendors supplying antennas and related hardware could still have ways to access network data. He added that “Western contractors may face the awkward prospect of working alongside firms they do not trust.”

(Photo by Dena Skulskaya)

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Tags: 5G, connectivity, huawei, networks, telecoms