The Asia Times, which broke the news of Bonn, Seoul and Tokyo all dissenting from Washington's decision on 30 November, reported on Thursday that the law would make Huawei and other network equipment providers liable for any security snafu.
Additionally, economist David P. Goldman wrote, Germany's security agencies would have carte blanche to examine the networks for any issues.
He said Merkel might have made a different decision if Donald Trump had been re-elected.
Sweden recently became the third country to say so publicly, but a court later suspended sections of a decision that had excluded Huawei from participating in Swedish spectrum bids. The spectrum auction itself was put on hold.
New Zealand and Poland have indicated that they are likely to toe the US line, but have yet to make public pronouncements about what policy they would follow.
The UK said in January that it would allow Huawei to bid for up to a third of equipment in non-core parts of the country's 5G networks, but later changed its mind and said all Huawei gear would have to be removed by 2027.
More recently, a report said this timetable had also been changed and companies would be asked to strip out the Chinese vendor's gear by September 2021.
Goldman said the security restrictions in the proposed law seemed to be very strict, but "they play into Huawei’s strategy of seeking security checks by independent laboratories".
Huawei has opened testing centres in both Bonn and Brussels; the company has had such centres in the UK for more than a decade.
Goldman pointed out that the biggest German mobile network provider, Deutsche Telekom, used Huawei gear in about two-thirds of its 4G network.
Additionally, the Chinese firm provided about 50% of the equipment for Vodafone and Telefonica, the next two big networks.
"The new 5G network needs to communicate with the old 4G system so that the cost of eliminating Huawei gear would be high," he wrote.
Huawei Australia has been contacted for comment.