The arrest of Huawei’s CFO in Canada provoked outrage from China at a critical time in trade talks with the US. Wanzhou Meng faces extradition to the US over potential violations of American sanctions on Iran, according to market sources. Prominent government-run media are painting Meng’s arrest as a politically motivated effort to contain China’s — and Huawei’s — ascendancy.
Trump and Xi dined at the Group of 20 summit in Buenos Aires, where they sought to defuse the trade war the US President sparked with Beijing this year by enacting tariffs on hundreds of billions of dollars’ worth of Chinese imports.
Meng’s arrest is part of an ongoing investigation by US prosecutors into whether Huawei violated banking laws as it sought to evade sanctions against Iran by routing a series of transactions through HSBC, according reports. Canadian Prime Minister Justin Trudeau is distancing himself from Meng’s arrest. Trudeau said this was a purely judicial process and that there was no engagement or involvement at the ‘political level.’
Reports say, the US has been bringing allies on board with its warnings that Huawei’s gear could enable Chinese spying. Australia and New Zealand in recent months have barred Huawei’s equipment from next-generation phone networks, though Europe has yet to take action. A further deterioration of trade relations between China and the US likely to result from the arrest of the Huawei executive could have a far-reaching impact on the semiconductor industry, according to Northland Capital Markets analysts.