The United States wants to subsidize Brazil to purchase 5G equipment from Ericsson and Nokia, secretly attacking Huawei

Reuters reported that U.S. Ambassador to Brazil Todd Chapman told Brazilian newspaper Folha de Sporp that the United States is in talks with Brazil and its local telecom companies about financing the acquisition of 5G equipment produced by Ericsson and Nokia.

In an interview published Thursday evening, Chapman said the U.S. funding was related to national security concerns of the U.S. authorities and was aimed at protecting data and intellectual property, as well as sensitive national information.

His comments are a blow to Huawei, the world's largest telecoms equipment maker, which has consolidated its presence in Brazil over the past two decades. Huawei did not immediately respond to a Reuters request for comment.

Huawei has successfully conducted 5G tests with four major operators - Telefonica Brazil, TIM Participacoes SA, America Móvil’s Claro and Oi SA - and helped them modernize their infrastructure ahead of 5G spectrum auctions.

Last August, Reuters reported that Huawei would invest $800 million to build a new factory in Sao Paulo state, Brazil, by 2022, as it expands its footprint in Latin America despite opposition from the United States. The Trump administration has urged governments around the world, including Brazil, to steer clear of Huawei over national security concerns, but few have heeded those warnings so far.

Chapman believes that allowing Chinese companies to participate in the country's 5G deployment could even discourage investment by other foreign companies. The US ambassador added that the funding discussed with Brazil would be provided by the International Development Finance Corporation, a development bank created by Trump in late 2018 to counter the operations of China Development Bank in other countries.