Huawei, the biggest global supplier of network gear used by phone and internet companies, has been the target of deepening U.S. security concerns. Under President Donald Trump and his predecessor, Barack Obama, Washington has pressured European countries and other allies to limit use of its technology.
The U.S. sees Huawei and smaller Chinese tech suppliers as possible fronts for spying and as commercial competitors. The Trump administration says they benefit from improper subsidies and market barriers.
The timing of the arrest is awkward following the announcement of a U.S.Chinese cease-fire in a trade war that has its roots in Beijing’s technology policy. Meng was detained in Vancouver on Saturday, the day Trump and Xi Jinping met in Argentina and announced their deal.
U.S. national security adviser John Bolton told NPR that he knew of the pending arrest in advance. He declined to talk about the specifics of the case and said he didn’t know if Trump knew about before it happened. He did add that there has been enormous concern about the practice of Chinese firms like Huawei allegedly using stolen U.S. intellectual property. He said that would be a major subject of negotiations with China.
Canadian Prime Minister Justin Trudeau said he was given a few days advance notice of the intention of Canadian authorities to arrest Meng but said it was the decision of law enforcement and there was no political interference.
“I can assure everyone that we are a country of an independent judiciary and the appropriate authorities took the decisions in this case without any political involvement or interference,” Trudeau said.
He also said he could not comment further because of a publication ban. A spokesman for Canada’s justice department said Meng requested the ban.
Stock markets tumbled on the news, fearing renewed U.S.-Chinese tensions that threaten global economic growth.
A Chinese government statement said Meng broke no U.S. or Canadian laws and demanded Canada “immediately correct the mistake” and release her.
Beijing asked Washington and Ottawa to explain the reason for Meng’s arrest, said a Foreign Ministry spokesman, Geng Shuang. He said arresting her without doing so violated her human rights.
But the Ministry of Commerce signaled that Beijing wants to avoid disrupting progress toward settling a dispute with Washington over technology policy that has led them to raise tariffs on billions of dollars of each other’s goods.
China is confident they can reach a trade deal during the 90 days that Trump agreed to suspend U.S. tariff hikes, said a ministry spokesman, Gao Feng.
Trump’s tariff hikes on Chinese imports stemmed from complaints Beijing steals or pressures foreign companies to hand over technology. But U.S. officials also worry more broadly that Chinese plans for state-led creation of Chinese champions in robotics, artificial intelligence and other fields might erode U.S. industrial leadership.
“The United States is stepping up containment of China in all respects,” said Zhu Feng, an international relations expert at Nanjing University. He said targeting Huawei, one of its most successful companies, “will trigger anti-U.S. sentiment.”
“The incident could turn out to be a breaking point,” Zhu said.
The Wall Street Journal reported earlier this year U.S. authorities were investigating whether Huawei violated sanctions on Iran. The Chinese government appealed to Washington to avoid any steps that might damage business confidence.
Meng was changing flights in Canada when she was detained “on behalf of the United States of America” to face unspecified charges in New York, according to a Huawei statement.
Huawei said it complies with all laws and rules where it operates, including export controls and sanctions of the U.N., the U.S. and European Union.
Meng is a prominent member of China’s business world as deputy chairman of Huawei’s board and the daughter of its founder Ren Zhengfei, a former Chinese military engineer.
Despite that, her arrest is unlikely to derail trade talks, said Willy Lam, a politics specialist at the Chinese University of Hong Kong.
“I think too much is at stake for Xi Jinping. He desperately wants a settlement,” said Lam.