‘No gun, no smoke’: Huawei steps up legal fight against US ban

The Chinese tech giant says a US law banning purchases of its equipment by government agencies is unconstitutional

Huawei Chief Legal Officer press conference
Chinese tech giant Huawei filed a suit in a US court in March challenging the constitutionality of a law that limits its sales of telecom equipment, and now it's trying to speed up that process [May 29: Jason Lee/Reuters]

Hong Kong – Chinese telecommunications giant Huawei is trying to speed up a lawsuit it has filed against the United States government, its latest move to block Washington’s efforts to contain the company on what the US says are national security concerns.

US President Donald Trump’s administration has accused Huawei of stealing trade secrets, fraud and violating US sanctions against Iran. It has banned government agencies from buying Huawei equipment. In a separate move, it has also barred US companies from selling components to Huawei, although that decision has been put on hold until August 19 to give American companies time to adjust.

“Politicians in the US are using the strength of an entire nation to come after a private company,” Huawei’s Chief Legal Officer Song Liuping said during a news conference at the company’s headquarters in Shenzhen. “This is not normal. Almost never seen in history.”

“The US government has provided no evidence to show that Huawei is a security threat. There is no gun, no smoke. Only speculation,” said Song.

Constitutional challenge

In March, Huawei filed a suit in the US challenging the constitutional validity of Section 889 of the 2019 National Defense Authorization Act on which the ban on purchases of Huawei equipment by the federal government agencies is based. This week, the company applied for a summary judgment, a move that could help it bypass a trial and speed up the legal process,

Huawei says the rule not only stops US government agencies from buying its equipment and services but also extends the prohibition to companies who want to buy Huawei gear or services.

Huawei is one of the world’s biggest makers of telecommunications equipment and a leader in cutting edge 5G mobile technology. But it relies on providers from overseas, including the US, for key components such as computer chips.

Al Jazeera’s Adrian Brown in Shenzhen says the company seems confident of the legal challenge it has filed.

“I think they were trying to demonstrate that in spite of this massive assault they’re currently under from the Trump administration, that this is a company which is not going to crack under pressure. And once more they denied that the company had any connections with the Chinese government, insisting they were not in the pocket of Beijing,” said Brown.

Analysts say Huawei’s move makes sense given its long-term aims.

“[The motion] is the right move for Huawei to assert itself as a legitimate, global telecommunications provider,” Ross O’Brien, principal consultant for telecommunications consultancy Ovum, told Al Jazeera.

‘Geopolitical competitiveness’

O’Brien says the US government’s motivations are more linked to “trade and geopolitical competitiveness than actual security.”

But he is doubtful that that move will ultimately help the company.

“The fact that this has been brought up as a security issue gives the [US] government lots of leeway. I don’t see the judgment coming in Huawei’s favour,” said O’Brien.

A hearing is scheduled for September 19 at the Eastern District of Texas.

A woman looks at her phone as she walks past a Huawei shop in Beijing, China May 16, 2019. REUTERS/Thomas Peter
Huawei’s legal fight with the US is “just one battle in the wider US-China contest for global tech dominance,” says an analyst [File: Thomas Peter/Reuters]

Kenny Liew, an information and communications technology analyst at Fitch Solutions says the US allegations of Huawei conducting “cyberespionage are still unfounded, and the US hasn’t publicly released proof of its claims.”

“We believe that it is just one battle in the wider US-China contest for global tech dominance,” Liew told Al Jazeera.

Huawei also believes the US has other motives.

“We believe that US politicians are using cybersecurity as an excuse to gain public support for actions that are designed to achieve other goals,” said Song.

Trump recently suggested that the company could become a bargaining chip in future trade talks.

“It’s possible that Huawei even would be included in some kind of a trade deal. If we made a deal, I could imagine Huawei being possibly included in some form of or some part of a trade deal,” Trump said at a White House briefing last week.

The US and China have imposed punitive tariffs on hundreds of billions of dollars worth of each other’s goods.

“We think Trump’s offer is likely genuine, and his decision to impose restrictions on Huawei is likely a move to pressure China into giving in to key US demands,” said Liew. But he believes that China is unlikely to yield.

Another Chinese telecommunications company, ZTE, faced a similar ordeal last year. It was first banned from operating in the US for seven years after being found guilty of selling equipment to Iran and North Korea in contravention of sanctions. The company was eventually allowed to resume business stateside after a $1bn fine, management shake up and installing a compliance team.

Ovum’s O’Brien thinks it is unlikely that Huawei will similarly agree to a financial settlement as the two companies face different issues.

CEO Ren Zhengfei told Chinese state media last week that the company had been preparing for the fallout of the US’ actions.

But he said: “US politicians might have underestimated our strengths.”

Source: Al Jazeera