Huawei expected to sue U.S. government in response to ban on federal agencies using its products

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Huawei is reportedly preparing to sue the U.S. government, challenging a ban on federal agencies using the Chinese telecommunications giant’s products, and further intensifying a dispute that has become a flashpoint of diplomatic tensions.

The New York Times reported that Huawei is expected to announce the lawsuit this week in the Eastern District of Texas, where Huawei’s U.S. headquarters is located. Citing two people familiar with the matter, the Times reports that the lawsuit may be an attempt to bring more attention to the issue between Huawei and the U.S. and call out attempts to undermine the Chinese company’s global expansion.

The new suit comes as Huawei is battling federal charges of stealing trade secrets from T-Mobile. Last week, lawyers representing Huawei pleaded not guilty to 10 counts, including theft of trade secrets, wire fraud and obstruction of justice. The case is set to go to trial in March of 2020.

Prosecutors filed a pair of indictments against Huawei in federal court that were unsealed last month  — one in Washington state and one in New York. The Washington indictment comes nearly two years after a jury awarded T-Mobile $4.8 million in damages in the long-running trade secrets dispute centered around a smartphone testing robot that caught the eye of federal authorities.

One of the defendants named in the New York indictment, Huawei CFO Wanzhou Meng, was arrested Dec. 1 in Vancouver B.C. The U.S. is seeking to extradite Meng, and Canada last week approved extradition proceedings, prompting a furious reaction from the Chinese government.

Huawei did not immediately respond to a request for comment.

Huawei is the top supplier of telecommunications equipment in the world and the second biggest smartphone maker, trailing only Samsung. The U.S. has put up barriers to keep the company from growing here, due to its close ties with the Chinese authorities and concerns that it would share customer data with the government.

The U.S. has been urging allies to ban Huawei as charges of espionage activities, trade secret theft and other allegations surface. However, these efforts haven’t hurt Huawei globally, as the smartphone maker passed Apple in market share for the first time last year and saw phone shipments increase 30 percent in 2018.