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  HOME | Business & Economy (Click here for more)

Huawei Challenges US Ban on Purchase of Its Products via Subsidies

BEIJING – Huawei filed on Thursday a petition in the United States Court of Appeals for the Fifth Circuit asking the tribunal to overturn a decision by the Federal Communications Commission banning American carriers from purchasing equipment from the Chinese tech giant via a subsidy program.

On Nov. 22, the FCC had excluded Huawei from a federal subsidies program on grounds that the company posed a threat to national security, which Huawei claims would make its equipment more expensive for US telecom carriers, especially in rural areas.

The legal team of the Chinese tech company said on Thursday at a press conference in Shenzhen – where the company is based – that the FCC’s decision was unlawful and violated Huawei’s rights to defend itself and was based on arbitrary conclusions.

“It is based on a fundamental misunderstanding of Chinese law, and on unsound, unreliable, and inadmissible accusations and innuendo, not ‘evidence,’” said Glen Nager, outside counsel for Huawei.

Nager added that the order “exceeds the FCC’s statutory authority” as it has “no national security expertise or authority.”

Huawei’s chief legal officer Song Liuping described the measure as unconstitutional and unsubstantiated.

“Banning a company like Huawei, just because we started in China… this does not solve any cybersecurity challenges,” he said.

“If the FCC is truly worried about the security of the telecom supply chain, then they should understand this: Equipment made in China by any vendor should also have the same risks,” he added.

Song also said that US politicians could not ignore the fact that the Chinese company had been working with rural US carriers for many years and had built trust among customers from small towns, including Kentucky and Montana.

“They (carriers) choose to work with Huawei because they respect the quality and integrity of our equipment,” Song said.

Huawei’s products, which are substantially cheaper than those of its competitors, have enabled the deployment of wireless networks in large, sparsely populated parts of the country where these infrastructures would have been virtually infeasible from a financial point of view.

In that sense, Karl Song, Vice President of Huawei’s Corporate Communications Department, said that the order by the FCC was threatening the improving connectivity in the rural parts of the US where other vendors are not willing to do business and “could cost hundreds of millions of dollars and even force some small carriers to go bankrupt.”

Although the future of Huawei in the US is in the air, American companies can continue doing business with the Chinese firm until at least February after US President Donald Trump allowed a new extension on Nov. 18.

The latest extension was for the same 90-day period as the one announced in August, and is the third time that Washington has postponed its decision to prohibit US firms from doing business with Huawei after the turmoil caused in the tech sector when the move was first announced in May.

The US government is wary of Huawei’s close ties with the Chinese government and says it suspects the tech giant could use its mobile phones and other equipment to spy on other countries and provide the information to the leaders of the Asian country.

The veto on Huawei business comes within the context of the trade war between the US and China, which has been underway almost since the time Trump took office in January 2017 and which, so far, has included US tariffs on hundreds of millions of dollars of Chinese imports to the US and similar reprisals on certain American products by Beijing.


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