Feb 19, 2020 - Technology

Huawei loses a round against Congress in federal court

Photo: Smith Collection/Gado/Getty Images

Huawei lost a round in court Tuesday, with a federal judge ruling that Congress was within its rights to exclude agencies and contractors from buying gear from Huawei and ZTE.

The big picture: This is one battle in the larger and more multifaceted conflict between Washington and Beijing that's playing out in courts, through trade negotiations and in public rhetoric.

Context: As part of the 2019 National Defense Authorization Act, Congress put limits on how government agencies and contractors could do business with certain companies, using language that specifically targeted Huawei and ZTE.

  • Huawei sued over the move last year, arguing the law was unconstitutional.
  • The judge ruled that Congress was acting within its rights to decide how the government spends its money.

What's next: Huawei says it will consider further legal options. Meanwhile the fight continues on many levels, with the U.S. enacting several policies designed to limit Huawei's ability to do business in the U.S. and weighing further actions.

  • Most recently, per the Wall Street Journal, the Trump administration has been weighing whether to require those using U.S.-made chip gear to certify their products won't be used for Huawei products.

Meanwhile: In a series of Tuesday tweets, President Trump threw his administration's Huawei policy into confusion.

  • He suggested that his own team's efforts to block U.S. sales to Chinese companies like Huawei were driven by a "National Security excuse," and said, "We don't want to make it impossible to do business with us."
  • Trump's comments will make it even harder for U.S. officials trying to persuade allies to bar Huawei equipment from their 5G networks.

Go deeper:

Go deeper

Huawei makes its case against U.S. hostilities

Illustration: Aïda Amer/Axios

Two top Huawei U.S. executives are at the RSA Conference in San Francisco this week, hoping the crowd of security experts will be more receptive to its position than have been policymakers in Washington, where the Chinese giant has gotten an increasingly hostile reception.

The big picture: Huawei's business has been under all manner of attack from the U.S. government, from trade sanctions to criminal charges to efforts to persuade allies not to buy their gear.

U.S. bans could make Huawei stronger

Illustration: Aïda Amer/Axios

The U.S.'s blunt policy of walling itself off from Huawei could backfire, making the Chinese telecom giant even stronger in the long term.

Why it matters: The grand decoupling of American and Chinese tech amid trade tensions and cybersecurity concerns, of which Huawei is at the center, is pushing China's companies to become increasingly self-reliant. Huawei's progress could position it to take the lead in the global U.S.-China tech race, experts say.

Why TikTok and Huawei are in lawmakers' sights

Illustration: Lazaro Gamio/Axios

Policymakers in D.C. are targeting a handful of specific Chinese-owned companies as they try to thread the needle between protecting U.S. security and avoiding wider disruption of the two nations' interdependent economies.

The big picture: A new wave of proposals in Congress is turning TikTok, Huawei and other specific companies into proxies in Washington's broader power struggle with Beijing.