Why Chinese Telecom Giant Huawei Is Suing the U.S. Government

Chinese telecom maker Huawei fired back on Wednesday evening against U.S. lawmakers and the Trump administration’s efforts to bar its products from the U.S. market. In a wide-ranging lawsuit filed in federal court in Texas, Huawei charged that a ban on government agencies buying its equipment violated multiple constitutional principles because it singled out the company without evidence.

“The U.S. Congress has repeatedly failed to produce any evidence to support its restrictions on Huawei products,” Guo Ping, one of Huawei’s rotating chairmen, said in a statement. “We are compelled to take this legal action as a proper and last resort.”

Last August, Congress passed and President Donald Trump signed a bill authorizing some defense spending known as the 2019 National Defense Authorization Act. The law included a provision that barred any government agency from buying Huawei gear directly or hiring contractors who used Huawei equipment. Recipients of federal loans or other benefits also could not spend the funds they received on Huawei products. Lawmakers said they feared that Huawei’s equipment could be compromised by the Chinese government and thus constituted a national security risk.

However, President Trump has yet to sign an executive order that is reportedly under consideration to go even farther and ban Huawei equipment from all U.S. networks. The administration pushed Canada to arrest Huawei Chief Financial Officer Wanzhou Meng in December on charges relating to violating an embargo against Iran.

In the 54-page lawsuit, Huawei said the defense spending law violated its rights under the due process clause of the U.S. Constitution because lawmakers did not cite any evidence of the alleged security risks. The company also said that by singling out Huawei for punishment, the law violating a rarely invoked section of the constitution against ‘bills of attainder,’ meaning legislative acts that declare individuals or groups guilty of a crime without judicial proceedings.

“Contrary to the statute’s premise, Huawei is not owned, controlled, or influenced by the Chinese government,” Huawei’s Chief Legal Officer Song Liuping said in a statement. “Moreover, Huawei has an excellent security record and program. No contrary evidence has been offered.”

Though the litigation could take years to wind through the court system, it could help Huawei bolster its arguments with other countries where the United States is lobbying in favor of similar bans. At the Mobile World Congress in Barcelona last month, U.S. officials held a news conference to air their security concerns about Huawei, while Huawei officials used multiple speaking opportunities to refute the charges.

None of the large U.S. telecommunications carriers, including Verizon (VZ) and AT&T (T), rely on Huawei gear, but some smaller carriers in rural areas have opted for the Chinese company’s lower cost products. Huawei was hoping to make greater inroads into the U.S. market as carriers transitioned to faster 5G networks, but the defense bill and a public campaign against the company by U.S. officials have thwarted the efforts.

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