Trump Linking Huawei, China Trade Roils Justice Department
President Donald Trump shocked some last month when he suggested that the criminal charges against Chinese telecom giant Huawei Technologies and its chief financial officer, Meng Wanzhou, might be used as leverage in his administration’s ongoing trade talks with China.
“We’re going to be discussing all of that during the course of the next couple of weeks,” Trump told reporters at the White House Feb. 22 in response to a question about Meng’s case. “We’ll be talking to the U.S. attorneys. We’ll be talking to the attorney general. We’ll be making that decision. Right now, it’s not something we’ve discussed.”
The president’s apparent willingness to possibly barter away the prosecution of Huawei and one of its executives in exchange for a favorable trade deal with China alarmed legal experts who say it could lead to pushback at the Justice Department.
“If the White House told the Department of Justice that it wanted Justice to dismiss altogether the case against Huawei and Ms. Meng, I’d expect there to be mighty objections and resistance to that,” said David Laufman, who served as a senior national security official at the Justice Department until last year and is now in private practice.
Ron Cheng, a former federal prosecutor who was the Justice Department’s sole resident envoy in Beijing, said it would be highly unusual for the criminal case against Meng to be affected by the trade talks. “There are a number of concerns about the precedent something like that would establish,” said Cheng, now a partner at the O’Melveny & Myers law firm.
The Justice Department unsealed criminal charges against Meng, Huawei and several subsidiaries on Jan. 29 for violating U.S. sanctions on Iran and stealing U.S. intellectual property, nearly two months after Meng was arrested in Canada at the request of U.S. authorities.
The indictments exacerbated tensions with China, which called the case against Meng “political persecution.” That prompted Trump’s overture.
Trump, who prides himself on his negotiating skills, could well have been bluffing in hopes of enticing the Chinese into a trade agreement.But a quid pro quo deal as part of the trade talks is not without precedent.
Last year, Trump ordered the Commerce Department to lift a ban imposed on ZTE Corporation, Huawei’s smaller rival. ZTE had violated the terms of an agreement with the department to settle charges that it had exported U.S. goods to Iran in violation of U.S. sanctions.
In Huawei’s case, the extent of Trump’s personal involvement and the nature of any talks between the White House and the Justice Department about the company’s fate remain unclear. After Meng’s arrest in December, a spokesman for National Security Adviser John Bolton said that neither Bolton nor Trump had been told about her detention in advance. Trump later said the White House had talked to the Justice Department about the Huawei case
Senior Justice Department officials have sought to tamp down talk of any linkage between the Huawei case and the ongoing trade talks with China. Asked about the issue after the Justice Department unsealed the indictments in January, then acting attorney general Matt Whitaker said, “We do our cases independent from the federal government writ large because that’s the way the criminal system has to be.”
A spokesman for the Justice Department declined to say whether the White House had engaged the department in any discussions about Huawei since Trump’s latest comments. The company has pleaded not guilty to the charges brought in New York and Seattle. Spokespeople for the U.S. Attorneys for those cities said the cases are proceeding.
The charges against Huawei come as the Trump administration has stepped up a global campaign against the telecom behemoth, warning that the company founded by a former People’s Liberation Army official poses a national security threat and urging allies to keep it out of their 5-G networks. While Australia and New Zealand have imposed a ban, other U.S. allies have demurred.
With business operations in more than 170 countries and annual revenues of $108 billion, Huawei is the world’s largest supplier of telecom equipment. Last year, the multinational company beat Apple to become the No. 2 manufacturer of smartphones and tablets in the world.
In national security related criminal cases, it is not uncommon for the Justice Department to notify the White House about impending law enforcement actions.This allows officials to deescalate conflict if necessary or weigh in on the timing of an announcement. “It’s not to give the White House prior approval authority or veto authority,” Laufman said.
Some experts see the real possibility that the White House crosses the line and intervenes in the criminal case. Short of calling for a dismissal of the case, the White House could press the Justice Department to devise a resolution that would afford the agency a measure of vindication without appearing to let the company or Meng off the hook.
Such a resolution could involve Huawei admitting responsibility, paying a hefty fine, and agreeing to a stringent compliance regime and other conditions, according to Laufman.
“But I think even there, that will likely engender concern throughout the Justice Department,” Laufman said.
That is how ZTE settled charges of violating U.S. sanctions. In 2017, ZTE pleaded guilty and paid $430 million for exporting U.S. goods and technology to Iran in violation of U.S. sanctions.
The company later admitted to violating the terms of its settlement with the Commerce Department and faced near collapse after the department responded by forbidding U.S. companies from selling it crucial components.
After Trump intervened, the Commerce Department lifted its ban, but not without imposing what it called the most “stringent compliance measures.”
The Huawei case could well be settled under similar terms. But there is a hitch. Because she faces criminal charges, Meng would have to appear in a U.S. court to enter a plea.
“The only way to resolve a case like this with some sort of a formal disposition is to come to the United States,” Cheng said.