Huawei ar­rest in Canada an­other wrin­kle in China-U.S. trade re­la­tions

The Peterborough Examiner - - Canada & World - JAMES MCCARTEN

WASH­ING­TON — If trade ties be­tween China and the United States had a Facebook page, this week’s re­la­tion­ship sta­tus would surely read “It’s com­pli­cated.”

Even more so now: in­vestors, barely over the mar­ket-roil­ing mixed mes­sages out of last week­end’s sup­posed tar­iff de­tente be­tween Pres­i­dent Don­ald Trump and Chi­nese coun­ter­part Xi Jin­ping fret­ted anew Thurs­day at the ar­rest in Van­cou­ver of Meng Wanzhou, the chief fi­nan­cial of­fi­cer of Huawei Tech­nolo­gies Ltd.

Huawei, of course, isn’t just any tech firm. It’s China’s largest mo­bile phone maker, the crown jewel in Xi’s na­tional IT am­bi­tions, a pri­vately held jug­ger­naut with pro­jected 2018 sales of more than $102 bil­lion (U.S.) that has al­ready over­taken Ap­ple in smart­phone sales and has Sam­sung squarely in its sights.

And Meng isn’t any old ex­ec­u­tive; the daugh­ter of Huawei founder Ren Zhengfei, she’s de­scribed in some cir­cles as “cor­po­rate roy­alty” in China. On TV and so­cial me­dia, com­men­ta­tors likened her ar­rest to the de­ten­tion in China of a Mark Zucker­berg sib­ling or a cousin of Steve Jobs.

Au­thor­i­ties in Canada, who de­tained Meng at the di­rec­tion of the U.S., were tight-lipped, cit­ing a pub­li­ca­tion ban re­quested by Meng her­self.

In Wash­ing­ton, De­part­ment of Jus­tice of­fi­cials also re­fused to com­ment. But The Wall Street Jour­nal has re­ported that U.S. au­thor­i­ties are in­ves­ti­gat­ing Huawei for pos­si­ble vi­o­la­tions of U.S. sanc­tions on Iran.

Trade ex­perts warned against ty­ing the ar­rest too closely to the trade ten­sions.

“I don’t think it’s in any­one’s in­ter­ests to con­flate the two,” said Patrick Le­blond, an in­ter­na­tional trade ex­pert and se­nior fel­low at the Cen­tre for In­ter­na­tional Gover­nance In­no­va­tion. Af­ter all, the Chi­nese can hardly point fingers when it comes to de­tain­ing peo­ple from other coun­tries, he added.

“This is some­thing that the Chi­nese do too, and I know on the Cana­dian side we’ve tried to keep these things sep­a­rate, so for now, I would ex­pect it would re­main like that. But who knows?”

It’s been a busy week for those try­ing to chart the sta­tus of Amer­ica’s re­la­tion­ship with China.

Trump went into the G20 sum­mit last week­end look­ing to ex­tract con­ces­sions from his great­est trade ri­val. He was con­vinced that China is a global trade cheat, steal­ing U.S. tech­nol­ogy or strong-arm­ing for­eign com­pa­nies into hand­ing it over, then build­ing it into prod­ucts that it sells it back to Amer­i­can con­sumers.

He emerged con­fi­dent that he’d won a 90-day truce, but mar­kets were not per­suaded — es­pe­cially af­ter his fa­mous “Tar­iff Man” tweet that threat­ened to ramp up the puni­tive levies that he and his sup­port­ers are con­vinced com­prise a win-win strat­egy that brings bil­lions of dol­lars into U.S. cof­fers.

Canada has al­ready suf­fered from the trade fric­tion, es­pe­cially be­cause of steel and alu­minum tar­iffs im­posed by the U.S. in the name of pre­vent­ing Chi­nese ex­ports from trick­ling through leaky bor­ders into the United States.

Meng Wanzhou

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