The US Department of Justice (DoJ) has charged Huawei for allegedly stealing trade secrets from T-Mobile and violating US sanctions by carrying out business with Iran (Huawei has pleaded not guilty).
Huawei CFO Meng Wanzhou was also arrested in Canada, by US request, for allegedly trying to bypass Iran sanctions. She was released on bail, but faces US extradition to the US based on the new DoJ charges. T-Mobile was recently awarded $4.8 million by a Seattle jury over the same alleged trade secret theft, but the damages were limited to breach of contract.
On top of that, the US is trying to convince other countries, especially those with US military bases, to stop using Huawei telecom equipment. The government has reached out to Canada, Germany, Japan, Italy and other allies, citing 5G's susceptibility to cyberattacks and espionage. The US has enough clout in areas of international trade and intellectual property to seriously damage Huawei's business.
It will reportedly argue that the US action is a "bill of attainder" that singles out a company for punishment without trial -- an action that's forbidden by the US constitution.
Now in full damage control, Huawei has taken a pugnacious, rather than submissive approach. With the lawsuit, it's reportedly planning to challenge a defense spending authorization law blocking executive agencies from using Huawei and ZTE's telecom equipment. It could argue that the US action is a "bill of attainder" that singles out a company for punishment without trial -- something that's forbidden by the US constitution.
The US government's actions come at an incredibly bad time for Huawei. It has some of the best smartphones on the market that would give Samsung and Apple stiff competition if they were available more widely in the US. On top of that, US telecom networks are spending billions ramping up to 5G, but are forbidden to buy Huawei's cutting-edge equipment.
The US government is mainly concerned with Huawei's close ties to China's central, increasingly repressive government, claiming that it will always be beholden to the Communist party. "Huawei has a profit incentive to act in good faith," a DHS official told the WSJ recently. "But the party will get what they want."