Huawei sues the US, this affect US-China relations

Andamento del mercato - 07/03/2019

The popular Chinese company Huawei is suing the United States over a regulation that prevents government agencies from purchasing the Chinese technology equipment. Huawei is demanding to review the law and claiming that is unconstitutional, while the Chinese giant is stepping forward and defending its rights following months of political pressure.

On Thursday Huawei filed the lawsuit and it mainly concentrates on a section in a law that is recognized as the National Defense Authorization Act. Section 889. It bans executive government agencies from obtaining telecommunications equipment made by the Chinese company.

The lawyers for the Chinese giant claimed that the provision in the NDAA is against the U.S. Constitution.

Huawei has suffered severe pressure from the United States of America President Donald Trump and his administration, which insists that the company's devices could be used for spying by the Chinese government.  Huawei too facing criminal charges from the Justice Department.

The company's founder, regularly rejected the accusations that Huawei is a security risk. All this occurs following Meng Wanzhou, Huawei's CFO, which filed legal proceedings against Canadian authorities claiming they arrested, kept and examined her in violation of her constitutional rights. Experts stated that the lawsuit may take months, and even years to resolve. The longer it takes the more complex will be for Justin Trudeau the Canadian Prime Minister while relations between Canada and China worsen.

This lawsuit complicates even more the fragile relationship between the US and China as well giving the impression that it may create an additional obstacle to achieve a trade deal. It for sure creates uncertainty between investors that may shift their focus from the save heaven greenback to more save assets.

The dollar index, which measures the USD versus major currencies, was holding near its more than 60 days high registered earlier in the week.

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