Chinese tech giant Huawei said Thursday it has filed a lawsuit challenging the legality of a U.S. law that bars government agencies and contractors from doing business with the company.
The lawsuit filed in a federal district court in Texas argues that a section of the 2019 defense appropriations bill is an unconstitutional infringement on Huawei’s ability to conduct business in the United States. Congress included the restriction in the bill after determining that Huawei and another Chinese tech company, ZTE Corp., posed a risk to national security, claiming it could be manipulated by Chinese intelligence services into cyberspying.
“We are compelled to take this legal action as a proper and last resort,” the company’s chairman, Guo Ping, said in a statement. “This ban not only is unlawful, but also restricts Huawei from engaging in fair competition, ultimately harming U.S. consumers.” Huawei is seeking to play a leading role in developing 5G, the fifth-generation of wireless technology.
The lawsuit is half of a dual legal battle Huawei is fighting with U.S. authorities. In the other half, the daughter of Huawei’s founder is fighting extradition to the United States to face several criminal charges.
Meng Wanzhou, Huawei’s chief financial officer and the daughter of founder Ren Zhengfei, was arrested last December in Vancouver, Canada, at the request of U.S. prosecutors, who have accused her of overseeing transactions that violate U.S. sanctions on Iran.
Her lawyers argued Tuesday that it will take time to develop her defense in part because of political issues and comments by U.S. President Donald Trump. Meng, who is under house arrest, is scheduled to be back in court May 8 for a new hearing.
Separate issues, US says
U.S. officials reject that her extradition case is related to the broader U.S.-China trade talks. The State Department Wednesday told VOA that her case is a law enforcement matter, and Canada is honoring its treaty obligations by considering the U.S. extradition request.
The Canadian court timetable suggests that the Huawei extradition battle could linger beyond the ongoing U.S.-China trade talks aimed at resolving a wide range of American concerns over China’s trade, investment and intellectual property rights policies. Negotiators have indicated talks could wrap up in the coming weeks.
Although U.S. officials say the Huawei CFO court case and the trade talks are entirely separate issues, they point to the deep divisions between the two governments on trade and technology issues.
Expand equipment ban
As the trade talks drag on, with few outward signs of significant progress, a bipartisan group of U.S. senators, including Texas Republican Senator John Cornyn, are calling for expanding the ban on Huawei equipment so it cannot be used in U.S. energy infrastructure.
“Huawei has recently become the world’s largest maker of inverters, the sophisticated control systems that have allowed the rapid expansion of residential and utility-scale energy production,” wrote 11 senators in a letter to Secretary of Energy Rick Perry and the Secretary of Homeland Security Kirstjen Nielsen.
“Our federal government should consider a ban on the use of Huawei inverters in the United States and work with state and local regulators to raise awareness and mitigate potential threats,” the senators wrote.
Several U.S. lawmakers, blasting Huawei’s close ties to the Beijing government, told VOA’s Mandarin service that Huawei “should never be in America doing business” and they will “do whatever we can to block that.”
“[You need to] realize that companies like Huawei and ZTE are wholly subsidiaries of the Chinese Communist party and therefore we have significant concerns about the extent to which they are able to infiltrate our domestic industry here,” said Republican Congressman from Wisconsin Mike Gallagher.
“We shouldn’t allow Huawei to operate in the U.S.,” said Republican Florida Senator Marco Rubio, “They are a state-supported national champion, not only dominate the global telecommunications market in 5G but if compelled by the Chinese government, they will have to turn over data.”
Last month Huawei’s founder Ren Zhengfei insisted his company has never spied for the government, and he would rather shut down the company than agree to any such request for information. Skeptics point out that no Chinese company can refuse to obey such a government request, because there is no independent judicial system in China for which a company can appeal.
Yihua lee and Xu Ning from VOA Mandarin Service contributed to this report.