U.S. Vice President Mike Pence and the top White House economic adviser dismissed an unusual suggestion from U.S. Attorney General William Barr that the United States consider taking control of two major foreign rivals of China-based Huawei Technologies Co Ltd.
Barr, a former general counsel at Verizon Communications Inc , said late last week that the United States and its allies should consider taking a "controlling stake" in Finland's Nokia and Sweden's Ericsson to counter Huawei's dominance in next-generation 5G wireless technology.
White House economic adviser Larry Kudlow later said the United States was working closely with Nokia and Ericsson, saying the companies' equipment was essential to the buildout of 5G infrastructure.
But he said the "U.S. government is not in the business of buying companies, whether they're domestic or foreign," adding that "there's nothing to prohibit American tech companies from acquiring" them.
The White House, and representatives for Barr declined to comment.
Shares in Nokia closed 4% higher on the New York Stock Exchange and Ericsson shares were up nearly 5.4% on Nasdaq. Both companies declined to comment.
Nokia and Ericsson have a combined market capitalisation of about $53 billion (41 billion pounds) and it is unclear what source of funds the U.S. government could potentially tap to take stakes in the firms or if foreign regulators would approve.
In a remarkable statement underscoring how far the United States may be willing to go to counter Huawei, Barr late last week disclosed proposals "by the United States aligning itself with Nokia and/or Ericsson."
Barr said the alignment could take place "through American ownership of a controlling stake, either directly or through a consortium of private American and allied companies."
Barr said that "putting our large market and financial muscle behind one or both of these firms would make it a far more formidable competitor and eliminate concerns over its staying power, or their staying power."
"We and our closest allies certainly need to be actively considering this approach," he added.
(Reporting by David Shepardson and Jeff Mason; Editing by Richard Chang)