Huawei Technologies Ltd.'s appeal against a United States law that restricted its ability to do business in the country was rejected by a federal judge on Tuesday, Reuters reported.

What Happened

The judge ruled that the U.S. Congress acted within its constitutional powers when it included the company's name in the National Defense Authorization Act back in 2018, according to Reuters.

"While we understand the paramount significance of national security, the approach taken by the U.S. Government in the 2019 NDAA provides a false sense of protection while undermining Huawei's constitutional rights. We will continue to consider further legal options," a Huawei spokesperson told Reuters.

Huawei had challenged the law in the U.S. District Court for the Eastern District of Texas in March 2019.

Legal experts had noted at the time that the lawsuit is likely to be dismissed because the U.S. judiciary doesn't like to second-guess national security decisions taken by the lawmakers or the president, Reuters reported at the time.

Why It Matters

The inclusion of Huawei in the law imposed severe restrictions on U.S. companies wanting to do business with Huawei or use its products if they also worked or intended to work with the U.S. government.

The U.S. government's sanctions against Huawei has only worsened since then.

The Department of Commerce further put Huawei on the "entity list," less than a year later, in May 2019, but a temporary general license granted to Huawei to circumvent the ban has been continuously extended by the government.

The Chinese telecommunications giant has been charged with conspiracy for racketeering, stealing trade secrets, wire fraud, and violating U.S. sanctions on Iran among the 29 counts it faces in the US District Court for the Eastern District of New York.

The government is also considering restricting U.S. companies from exporting to Huawei, in addition to the import ban already in place, as reported on Tuesday.

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