Huawei CFO Arrest in Canada Likely to Affect US-China Trade Negotiation

Huawei CFO Arrest

Deputy chair and CFO of Huawei Technologies has been arrested in Canada and faced with expatriation to the United States.

Meng Zhou who is also the daughter of Huawei founder Ren Zhengfei was reportedly detained in Canada on December 1. Her arrest is due to Chinese telecom giant’s potential violation of US sanctions on Iran.

China Outraged Over Huawei CFO’s Arrest

Chinese embassy in Canada protested to the arrest of its telecom giant’s executive calling it a violation of its citizens’ rights. It also demanded the United States and Canada to rectify their wrongdoings regarding this case.

Huawei CFO Arrest and US-China Relations

Huawei technologies is one of the world’s major telecom equipment manufactures and China’s significant global patent filer.

The tech giant has also surpassed Apple and become a major smartphone maker, second after Samsung. The company’s flagship phones like Huawei Mate 10 are already giving tough time to iPhone X and Samsung S8.

Experts are speculating an escalation of US-China trade war due to arrest of Huawei CFO in connection with violating of US sanctions.

The Economist journalist Simon Rabinovitch opined in a tweet that it was hard not to see this as a big escalation of tensions due to significance of the company’s economic value for China.

A Threat to US- China Trade War Truce

Arrest of the Huawei executive is also threatening trade truce between Beijing and Washington.

According to reports Mei Xinyu an expert close to Chinese ministry of commerce opined that US will not ease its stance on China so the country should be prepared for an escalation of trade war.

On Wednesday, December 5, major stock markets around the globe witnessed a sell-off trend amidst fears that improved trade relations between the United States and China as a result of President Trump and Prime Minister Xi’s meeting at G20 summit, were being overplayed.

Responding to this, President Trump had even tried to calm down investors by tweeting his feeling of strong signals from Prime Minister Xi on US-China trade truce.

Now when Canada has arrested the executive of a Chinese telecom giant on US’s requests experts are fearing that US-China trade war may escalate or the incident may push back trade truce that both countries reportedly agreed to on the eve of G20 summit in Argentina.

It is to be noted that Ren Zhengfei who is an ex- army engineer is one of the significant business executives. His company Huawei stands with likes of Ali Baba and other corporates which are taking Chinese economy to a whole new level. Therefore, arrest of Huawei chief in Canada for potential violation of Iran ban is more likely to harm Chinese trust in the United States. Consequently, recently agreed trade truce between the head of the states of both the countries can be in serious jeopardy.

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