Huawei Trial Exposes CCP-Sponsored IP Theft; Trump Must Prioritize This Issue with Xi
Source: Helen Raleigh. "Charges Against Telecom Giant Spotlight CCP-Sponsored IP Theft." September 14, 2026. thefederalist.com
The Gist
The author argues that Huawei's ongoing criminal trial reveals a broader pattern: the Chinese government systematically enables and benefits from stealing American intellectual property, which has cost the U.S. economy hundreds of billions of dollars. She concludes that Trump should make this a top issue in his upcoming meeting with Xi Jinping and refuse to loosen trade restrictions until China stops this behavior.
Conclusion
Intellectual-property theft, as a state-sponsored CCP practice exemplified by the Huawei case, should be a top priority when President Trump meets with Xi Jinping, and the U.S. should refuse to ease export or investment restrictions while such theft continues.
Premises
- Huawei is facing 12 federal criminal charges, including racketeering conspiracy and trade secret theft, with prosecutors describing its business model as 'theft, lies, cover-up' over a 20-year period.
- Huawei's founder has ties to the People's Liberation Army, and U.S. intelligence committees have long warned that Huawei equipment could enable Chinese espionage.
- Chinese law (e.g., the 2017 National Intelligence Law) compels companies and individuals to assist state intelligence activities, tying private firms to CCP objectives.
- Historical patterns show Chinese companies (e.g., Huawei via Nortel) have used stolen IP to undercut competitors and dominate markets like telecom, EVs, and AI chips.
- A 2017 government commission estimated Chinese IP theft costs the U.S. $225-600 billion annually, likely underestimating the true damage.
- New evidence shows Chinese AI companies (DeepSeek, Moonshot) are using 'distillation' techniques to exploit U.S.-developed AI models without compensation, likely with government knowledge.
- While a criminal court can only try Huawei as a company (not the CCP or China itself), the systemic issue of state-sponsored theft requires a policy-level response from governments.
Assumptions
- The CCP bears primary responsibility for corporate IP theft by Chinese companies operating under its jurisdiction.
- Individual corporate malfeasance (like Huawei's) is representative of a broader, systemic state-sponsored strategy rather than isolated incidents.
- Economic damage estimates from IP theft are reasonably accurate and meaningful for policy decisions.
- Diplomatic pressure and trade restrictions are effective tools for changing CCP-sponsored IP practices.
- AI model 'distillation' is comparable in kind (even if not degree) to traditional IP theft and warrants similar policy concern.
- The U.S. government's characterization of Chinese AI companies' actions is accurate and sufficiently substantiated.