The EU has warned that it may investigate claims that Chinese telecom firms have been paid subsidies, allowing them to flood markets with cheap equipment. The EU fears that illegal payments may be helping firms such as China's Huawei Technologies and ZTE, at the expense of European producers such as Ericsson. However, the EU will not act immediately, in the hope that a deal can be reached between the two sides. China is the EU's second-biggest trading partner, after the US.