Huawei had filed the lawsuit in March, arguing that a law preventing US federal agencies from buying its products violates the US constitution by singling out an individual or group for punishment without trial.
Lawyers for the US Department of Justice challenged that claim in a filing on Wednesday, saying the law wasn't unconstitutional punishment, but rather the "logical next step" to protect the country and ensure China isn't given "a strategic foothold" in US networks.
The lawyers said American lawmakers and officials had been warning against Huawei's potential use for Chinese "cyber-activity" for over a decade, adding that the company was using outdated arguments from the Civil War and Cold War eras.
The portion of the law in question "does not sentence Huawei to death, imprison it, or confiscate its property," they argued, moreover it "plainly does not preclude Huawei from engaging in its chosen profession."
Huawei is the world's largest telecommunications equipment maker and a leading smartphone brand. It has been under pressure from a US-led campaign against the company urging allies to ban or restrict Huawei products from their 5G networks, citing national security concerns.
The company did not immediately respond to a request for comment but has repeatedly denied that any of its products pose a national security risk. The lawsuit is separate from the US Commerce Department's recent blacklisting of Huawei, which restricts American companies from doing business with the Chinese firm.
Analysts have said the lawsuit is more of a symbolic gesture, given that Huawei has been barred from core US telecommunications networks for years.
The bigger concern for Huawei right now is being on the US trade blacklist. The US Commerce Department added Huawei to a list in May banning US firms from selling tech and components to it without first obtaining a license to do so. Huawei warned last month that the US ban could cost it $30 billion in lost sales over the next two years.
On Saturday, US President Donald Trump changed course and said "US companies can sell their equipment to Huawei," as long as the transactions won't present a "great, national emergency problem."
It was welcome news for the Chinese tech giant and its suppliers, but the administration has since offered few public details about what will happen next, and it remains unclear which products US companies will be able to sell to Huawei.