U.S. Judge Deals Blow to Huawei: Trade Secret Charges Stand—Tech Giant’s Legal Woes Deepen

Huawei just got a reality check from a U.S. judge—and it’s not the kind that comes with a software update.

The ruling: Trade secret theft charges against the Chinese tech titan won’t be dismissed, setting the stage for a high-stakes legal battle that could reshape global tech competition.

Why it matters: This isn’t just about alleged IP theft—it’s a proxy war for tech dominance, with Washington drawing a line in the silicon.

The cynical finance angle: Wall Street’s already pricing in the outcome—Huawei’s supply chain partners are dumping stock faster than a hot Bitcoin wallet after a 20% crash.

Bottom line: When the U.S. legal system meets Chinese tech ambition, sparks fly. And someone’s always left holding the legal bills.

TLDRs;

• A U.S. judge has denied Huawei’s request to dismiss most charges in a 16-count indictment involving trade secret theft and fraud.
• Prosecutors allege Huawei used Skycom, a Hong Kong-based firm, to secretly do business in Iran and move over $100 million through U.S. banks.
• The case accuses Huawei of stealing trade secrets from six U.S. companies as part of a broader racketeering scheme.
• Despite the end of the China Initiative, the case moves forward, with a trial scheduled for May 2026.

Huawei Technologies will proceed to trial in the United States after a federal judge declined to dismiss major charges against the Chinese tech giant.

On Tuesday, July 1, U.S. District Judge Ann Donnelly ruled in Brooklyn that prosecutors had laid out sufficient grounds for most of the 16 criminal counts Huawei faces. The indictment accuses the firm of stealing trade secrets from U.S. companies, misleading financial institutions, and violating American sanctions by conducting covert business in Iran.

U.S. links Huawei to Iranian business via Skycom

Central to the case is Huawei’s alleged relationship with Skycom Tech Co. Ltd., a Hong Kong-based company prosecutors claim operated as Huawei’s proxy in Iran.

According to court filings, Skycom facilitated over $100 million in financial transactions through the U.S. banking system while effectively functioning as Huawei’s Iranian subsidiary. Prosecutors say this structure was used to circumvent U.S. sanctions and mask the true nature of Huawei’s global operations.

Huawei, in its defense, has pleaded not guilty and argued that the indictment was politically motivated. It had sought dismissal of 13 out of the 16 charges, asserting that it had been unfairly targeted as part of a broader geopolitical campaign.

Trade secret theft allegations go to trial

The indictment also accuses Huawei of running a years-long effort to acquire trade secrets from six American firms. Prosecutors claim the company used deceptive tactics to access proprietary information in order to advance its technological capabilities without bearing the cost of research and development.

This alleged conduct falls under racketeering statutes, intensifying the legal stakes for the company. Judge Donnelly’s decision indicates that the evidence presented by the government meets the legal threshold for a jury to consider these claims.

The trial is scheduled to begin on May 4, 2026, and is expected to run for several months. The outcome could have significant implications for global tech competition and U.S.-China relations, especially at a time when digital infrastructure and national security are increasingly intertwined.

Case rooted in now-defunct China Initiative

The case was first filed in 2018, during the TRUMP administration’s China Initiative, a Justice Department program designed to combat intellectual property theft linked to Chinese entities.

Although the initiative was shut down in 2022 over concerns of racial profiling and ineffective targeting, the Huawei case has continued under the Biden administration. Legal observers view the trial as a major test of how the U.S. handles national security prosecutions against foreign corporations in a post-China Initiative era.

Huawei has remained defiant, maintaining its innocence while highlighting its global operations across 170 countries. Still, its access to American technology has been severely restricted since 2019, with Washington citing persistent security risks. The ongoing legal battle further complicates Huawei’s efforts to rehabilitate its reputation in Western markets.