Why the Huawei Scandal Will Reignite the US-China Trade War

Now, a new report published this afternoon by The Wall Street Journal, reveals that Federal prosecutors are planning to start a criminal investigation of Huawei because of its alleged theft of T-Mobile's tech secrets.

However, Huawei noted that "Huawei and T-Mobile settled their disputes in 2017 following a USA jury verdict finding neither damage, unjust enrichment nor willful and malicious conduct by Huawei in T-Mobile's trade secret claim".

The Wall Street Journal writes that the investigation arose from a 2014 civil case in which T-Mobile sued Huawei for gaining access to one of the carrier's labs and taking unauthorized pictures of a smartphone testing robot called "Tappy", which is created to simulate the touch of a human finger.

An indictment could come soon, the Journal added.

Emily Langlie, a spokeswoman for the US Attorney's office in Seattle, declined to comment, as did a spokesman for Huawei.

The U.S. probe into Huawei includes allegations by T-Mobile in a 2014 lawsuit that it stole information, according to the person familiar with the matter.

Although Huawei lost the case, the jury reportedly didn't find Huawei's misappropriation as "willful and malicious" as T-Mobile alleged.

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The latest allegation could deepen the trade rift between China and the United States and put further pressure on Huawei, which is at the centre of suspicions that its equipment allows China to monitor sensitive communications.

A bipartisan group of legislators in the United States has introduced bills that would prohibit the sale of U.S. chips or other components to Chinese telecommunications companies that violate Washington's sanctions or export control laws.

Senators from the United States introduced the Telecommunications Denial Order Enforcement Act, which prohibits the export of parts of U.S. technology to Chinese telecommunications companies. Meng is facing charges in the USA related to possible violations of trade sanctions on Iran.

"Huawei is effectively an intelligence-gathering arm of the Chinese Communist Party whose founder and CEO was an engineer for the People's Liberation Army", Cotton wrote in a statement.

It may not be spying for the Chinese government but it could be spying on other companies for its own gain.

Huawei is the world's largest maker of telecommunications equipment and considered a "national champion" in China. Huawei also maintains it was an isolated incident that involved two employees who acted inappropriately. As part of the agreement, the USA lifted a ban in place since April that prevented ZTE from buying the US components it heavily relies on to make smartphones and other devices.

  • Darren Santiago