Huawei faces a US racketeering trial in New York this week

Huawei goes on trial in New York this week, seven years after the United States charged it. Jury selection begins on Tuesday. The company is accused of racketeering, stealing trade secrets, wire fraud and bank fraud, and it denies all of it.

Larry Neumeister reported the trial date for the Associated Press. Every charge is an allegation that no jury has tested. Testing them is the point of the next few weeks.

Huawei has tried to have the case thrown out. Its lawyers argued in court filings that the allegations were too vague. They also called some of them “impermissibly extraterritorial”, and said the wire and bank fraud counts were not domestic.

Beijing has been blunter. Chinese officials have called the prosecution “economic bullying” and accused Washington of using national security as a pretext for “oppressing Chinese companies”.

What the indictment claims

The core allegation is theft of American technology. Prosecutors also say Huawei and some subsidiaries did business in North Korea despite US sanctions there.

Racketeering is the charge that binds the rest together. It lets prosecutors present separate acts as one pattern of conduct by one organisation, rather than as a list of unrelated incidents. That is why the case covers a decade, several countries and four kinds of alleged wrongdoing at once, and it is also why Huawei’s lawyers attacked the breadth of it.

A second allegation concerns Iran. Prosecutors say Huawei used a Hong Kong shell company, Skycom, to sell equipment there in breach of sanctions. They further allege the company installed surveillance equipment that helped Iran monitor protesters during the anti-government demonstrations of 2009.

That last claim casts the longest shadow. Arguments about whether Western networks should carry Chinese equipment always circle one question: what can the vendor see. A jury will now decide a version of that question on evidence.

The case Meng Wanzhou left behind

Most people remember this prosecution through one person. Meng Wanzhou is Huawei’s chief financial officer and the daughter of its founder. Prosecutors charged her with fraud over what they said she told HSBC about the company’s Iranian business.

Canada arrested her in late 2018 on a US extradition request. She went home in September 2021, in a prisoner swap that also freed two Canadians held by China. Under that deal the US dropped its extradition request and said it would dismiss the fraud charges against her. Her case is over. The company’s is not.

The corporate case did move in June. A US judge ruled that Meng’s admissions could be used against Huawei. That ruling is what the prosecution carries into the courtroom on Tuesday.

A very different company from the one charged

The indictment is from early 2019 and has been expanded since. The Huawei in the dock is not the Huawei of 2019.

Back then the argument was about 5G. During Trump’s first term the US lobbied allies to keep Huawei equipment out of their next-generation networks, and in places it worked. Britain and Canada joined the American position. Huawei remains barred from selling to US carriers.

The company is still the world’s biggest supplier of wireless network gear. What it lost was everything around that: the American market, the Western allies that followed, and access to most US processor chips.

It also kept selling to consumers. Phones and other electronics remain a visible part of the business, and last week it launched a tri-fold handset two days before Apple’s own event. That is a company competing on product, not one waiting on a verdict.

So it built its own chips. That pivot is now the interesting part of Huawei, rather than the telecoms equipment the trial is about. Its accelerators still trail Nvidia’s by a wide margin. One of its scientists argued in August that Nvidia will eventually hit the same wall.

The timing is doing a lot of work

The trial opens in a week when Huawei is winning arguments it lost in 2019.

Bloomberg reported on Monday that Malaysia is leaning towards Huawei chips for its national AI project. That would make it the first government to openly choose Chinese accelerators over American ones. Huawei is also bidding to build AI data centres for Egypt, and Washington is assembling a counterbid.

So a jury will spend weeks on whether Huawei stole technology in the 2010s. Meanwhile governments are deciding whether to buy the technology it built in the 2020s. The verdict lands in the middle of that.

Europe is watching from a third position. Belgian prosecutors are holding a chip researcher over secrets allegedly passed to China, a case with no connection to Huawei but with the same anxiety underneath it. The question of how Chinese firms acquired their capabilities is being asked in more than one courtroom.

What a verdict would and would not settle

A conviction would give the US case a factual record rather than an assertion. That matters, because allies have spent seven years acting on allegations while the evidence sat in filings. A finding of fact travels further than an indictment does.

The burden sits entirely with the prosecution. Huawei has denied the allegations throughout, has never been convicted of them, and spent years trying to have the case dismissed before it reached a jury.

An acquittal would be more awkward. The bans, the blacklists and the pressure campaign would all remain in place, resting on national security judgments that were never contingent on this trial.

Either way the commercial question is already moving elsewhere. Malaysia is not waiting for a New York jury, and neither is Egypt. The verdict will describe what a company did a decade ago. The market is deciding what it sells next.