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Trade war

Huawei strikes back at US to protect global 5G opportunities

Lawsuit over government ban offers chance to reassure potential customers

Glen Nager, Partner at Jones Day, right, speaks during a press conference of Huawei in Shenzhen, Guangdong province on Thursday.   © AP

BEIJING/WASHINGTON -- Huawei Technologies has ratcheted up its confrontation with Washington by filing a lawsuit challenging the U.S. ban on its products, aiming to send a clear message to other nations that there is no basis for excluding its equipment from 5G networks.

In a news conference Thursday at Huawei's Shenzhen headquarters, rotating chairman Guo Ping decried Washington's calls for other nations to shut the Chinese telecommunications giant out of their fifth-generation wireless infrastructure over alleged security risks.

"We question its intent of not wanting other countries to use Huawei," he said. "Is it afraid that other countries may catch up to and overtake it using our advanced 5G technologies?"

With commercial 5G service expected to begin this year, this is a pivotal time for Huawei's efforts to further expand the overseas operations that generate half of its $93 billion in annual revenue. The lawsuit allows it to challenge Washington head-on and make its case to customers elsewhere.

The case centers on the 2019 National Defense Authorization Act, which will bar American government agencies from buying Huawei products or working with companies that do. Huawei asserts that the measure is unconstitutional.

The U.S. government "has never provided any evidence supporting their accusations that Huawei poses a cybersecurity threat," Guo said.

Before this, Huawei had said little about the legislation since its passage seven months ago. Asked in a rare news conference in January about strengthening headwinds in the U.S. and elsewhere, CEO Ren Zhengfei said he believed that growth would continue at a moderate pace.

Huawei, and Ren himself, likely did not anticipate that Washington would step up its campaign against the company. U.S. Vice President Mike Pence named Huawei as a "threat" in a visit to Europe last month and urged other countries to "reject any enterprise that would compromise the integrity of our communications technology or our national security systems."

Chinese Foreign Ministry spokesman Lu Kang indicated Thursday that Beijing supports Huawei's lawsuit. "We believe it is totally legitimate and understandable for a company to safeguard its legitimate rights and interests in a lawful way," he said.

The likely fate of the case may become clear fairly soon, as American courts tend to be quick about ruling on questions of constitutionality. Russian cybersecurity company Kaspersky Lab filed a lawsuit against the U.S. government in December 2017 over a ban on its products, but the case was dismissed the following May.

U.S. President Donald Trump has hinted that he could use Huawei as a bargaining chip in trade talks with China. Washington has charged the company and its chief financial officer, Meng Wanzhou, with violating sanctions against Iran.

Asked in late February about the possibility of dropping the charges, Trump said he would speak with Justice Department officials and the attorney general over "the next couple of weeks" and make a decision. Trump is expected to meet with Chinese President Xi Jinping as early as this month to sign an agreement to end the trade war.

Congress, meanwhile, remains firmly aligned against Huawei and is pushing Trump's administration to maintain a tough stance. The defense bill blocking the company from government procurement passed with bipartisan support -- a rarity in a polarized legislature. With all three branches of the U.S. government entangled in the case, the outlook for Huawei remains unclear.

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