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Huawei Said to Be Preparing to Sue the U.S. Government

A Huawei store in Beijing. A company lawsuit against the United States government is expected to challenge part of a defense spending bill that blocks executive agencies from using its telecommunications equipment.Credit...Greg Baker/Agence France-Presse — Getty Images

SHANGHAI — The Chinese electronics giant Huawei is preparing to sue the United States government for barring federal agencies from using the company’s products, according to two people familiar with the matter.

The lawsuit is to be filed in the Eastern District of Texas, where Huawei has its American headquarters, according to the people, who requested anonymity to discuss confidential plans. The company plans to announce the suit this week.

The move could be aimed at forcing the United States government to make its case against the Chinese equipment maker more publicly. It is part of a broad push by Huawei to defend itself against a campaign led by the United States to undermine the company, which Washington sees as a security threat. Executives have spoken out strongly against America’s actions, and new marketing campaigns have been aimed at mending the company’s image among consumers.

For many years, United States officials have said Beijing could use Huawei’s telecommunication equipment to spy and disrupt communication networks. The company has denied the allegations, but major wireless carriers such as AT&T and Verizon have effectively been prevented from using Huawei’s equipment as a result.

Over the past year, Washington has ramped up its pressure on the firm, which is preparing to take a major role in the construction of next-generation wireless networks around the world. American officials have urged other governments to ban the use of Huawei’s products. This year, the Justice Department filed criminal charges against the company and its chief financial officer in connection with evading American sanctions on Iran.

A hearing that is set to begin this week in Canada will determine whether the company’s finance chief, Meng Wanzhou, will be extradited to the United States to face charges. Ms. Meng’s lawyers have sued the Canadian government and police, arguing that the circumstances of her arrest and detention in December violated her rights.

[Many Canadians see Ms. Meng’s case as an example of foreign money’s influence in Vancouver.]

The criminal case against Ms. Meng in the United States could be complicated by comments from President Trump as the White House has engaged in trade negotiations with China. While criminal cases have traditionally been independent matters, Mr. Trump indicated that Huawei’s fate could be a bargaining chip.

During a meeting in the Oval Office with a delegation of Chinese officials last month, Mr. Trump said, “We’ll be making that decision,” when asked if he would drop the criminal charges against Huawei as part of the trade deal. He added, “We’ll be talking to the attorney general.”

A lawsuit by Huawei against the United States is expected to challenge a section of a defense spending authorization law that was approved last year. The provision blocks executive agencies from using telecom equipment made by Huawei and another Chinese company, ZTE.

According to one of the people familiar with the matter, Huawei is likely to argue that the provision is a “bill of attainder,” or a legislative act that singles out a person or a group for punishment without trial. The Constitution forbids Congress to pass such bills.

Huawei’s plans are not final. It could still decide to change course, or to not file a lawsuit at all.

The United States Embassy in Beijing did not immediately respond to a request for comment. A call placed outside business hours to the United States Court House in Plano, Tex., where Huawei’s American headquarters are, was not answered.

[China announced espionage accusations against a former Canadian diplomat on Monday, days before Ms. Meng’s extradition hearing was set to take place.]

In many ways, the Huawei case echoes that of another company that has aroused security concerns in the United States: the Russian cybersecurity firm Kaspersky Lab.

Around two years ago, American officials began expressing worries that Moscow could use the company’s software to gather intelligence. The company denied the allegations. But in September 2017, the Department of Homeland Security directed federal agencies to begin removing the company’s products from government systems. Congress then codified the ban in a spending law.

Kaspersky filed two lawsuits in response, arguing that the prohibition amounted to a bill of attainder. In May, a judge in the District of Columbia dismissed the suits, ruling that Congress was motivated by the legitimate desire to protect government computer networks against Russian intrusion. The judge also said Kaspersky’s sales to the American government were such a small fraction of the company’s business that the ban was not especially harsh.

An appeals court upheld the ruling a few months later. Banning Kaspersky was a “prophylactic, not punitive,” measure, the judge in the appeal, David S. Tatel, wrote.

“Given the not insignificant probability that Kaspersky’s products could have compromised federal systems and the magnitude of the harm such an intrusion could have wrought, Congress’s decision to remove Kaspersky from federal networks represents a reasonable and balanced response,” Judge Tatel wrote.

Raymond Zhong reported from Shanghai, and Paul Mozur from Hong Kong. Alan Rappeport contributed reporting from Washington.

Follow Raymond Zhong and Paul Mozur on Twitter: @zhonggg and @paulmozur.

A version of this article appears in print on  , Section A, Page 10 of the New York edition with the headline: Electronics Giant Said to Be Preparing to Sue the U.S.. Order Reprints | Today’s Paper | Subscribe

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