Chinese telecommunications equipment maker Huawei Technologies Co Ltd said it will continue to consider further legal options, after a federal judge on Tuesday rejected its constitutional challenge to a U.S. law that restricted its ability to do business with federal agencies and their contractors.

"While we understand the paramount significance of national security, the approach taken by the U.S. government in the 2019 NDAA (National Defense Authorization Act) provides a false sense of protection while undermining Huawei's constitutional rights. We will continue to consider further legal options," the company said. 

In a 57-page decision, U.S. District Judge Amos Mazzant ruled in favor of the United States, concluding that Congress acted within its powers by including the restriction in the National Defense Authorization Act, which also targeted Chinese company ZTE Corp.

Huawei filed the lawsuit in March 2019, saying a law limiting its U.S. business was unconstitutional and argued that the NDAA was overbroad in restricting its sales and violated due process. Huawei had challenged Section 889 of the National Defense Authorization Act, signed into law by U.S. President Donald Trump, which bars federal agencies and their contractors from procuring its equipment and services. Huawei lost on a summary judgment decision.

Huawei's lawsuit said its "equipment and services are subject to advanced security procedures, and no backdoors, implants, or other intentional security vulnerabilities have been documented in any of the more than 170 countries in the world where Huawei equipment and services are used."

While Huawei had very little share of the U.S. market before the bill, it is the world's biggest telecoms gear maker and is seeking to be at the forefront of a global roll-out of fifth-generation (5G) mobile networks and services.

The U.S. has been claiming that Huawei may be used by the Chinese government to conduct so-called "espionage activities," but has never produced substantial evidence. Huawei has repeatedly denied the U.S.' allegations.

Reuters reported on Tuesday that the Trump administration is also considering changing U.S. regulations to allow it to block shipments of chips to Huawei from companies such as Taiwan Semiconductor Manufacturing Co Ltd (TSMC), the world's largest contract chipmaker.

(With input from Reuters)