What happened was...
Sabrina Meng Wanzhou, the daughter of Huawei’s found Ren Zhengei, has been arrested in Canada. She will appear in court today to face extradition to the US. The shocking arrest, executed at America's request, seemed out of place after Trump announced a 90-day truce in the US - China trade war. Meng is Huawei’s Chief Financial Officer, and Huawei is one of the top telecommunications companies in the world.
We don’t really know for sure why Meng was arrested but we do know it has to do with a US investigation into whether some companies use the global banking system to get around US sanctions against Iran. Since 2016 the US has been trying to find out if Huawei has shipped products which were produced in the US to Iran. This is not as wild as it sounds because, for example, Huawei’s phones may contain US-made chips. More recently the US has suspected Huawei may have used HSBC to carry out its trade with Iran. Companies are not allowed to use the US banking system to trade with countries sanctioned by the US.
Tech company Huawei is one of the biggest providers of phones and services in the world. It is part of Beijing’s 2025 plan to rival US tech power. But like the other Chinese telecoms giant ZTE it has been dogged by accusations that it is not really sticking to trade rules and might be spying on users for the government.
The Trump connection
It’s not clear whether or not US President Donald Trump knew about the impending action against Meng. It happened around the same time he was meeting President Xi Jingping in Argentina, talking about the trade war. Both the White House and Canadian leader Justin Trudeau have said they have nothing to do with Meng’s arrest. But, some US senators want Huawei barred from making US 5G technology, saying the Chinese company is a threat to national security.
Huawei under fire
Japan announced today that it will be revising its government buying orders. ban Huawei and ZTE from government contracts. US intelligence agencies allege Huawei is linked to China’s government and that its equipment could contain “back doors” for use by spies, although no evidence has been produced publicly and the firm has denied the claims.
In addition, Australia and New Zealand have blocked Huawei from building 5G networks, while Britain’s BT Group said on Wednesday it was removing Huawei’s equipment from the core of its existing 3G and 4G mobile operations and would not use the Chinese company in central parts of the next network.
It’s not hard to understand how officials can be so confused over the US’s trade policy with China. Trump tweeted encouraging things about his meeting with Xi. Then he seemed to change course on that. Then Meng was arrested. It seems the US government is working against itself.
State media called the arrest a suppression of Chinese technology ambitions