The financial director (CFO) of the Chinese technology company Huawei, Meng Wanzhou, was arrested in Canada at the request of the United States, which requested his extradition. Meng is also the daughter of the founder of Huawei. The arrest took place on 1 December last but the news was released by the Canadian authorities on the evening of 5 December, without providing further details. According to US media, Huawei violated the trade embargo imposed by the US on Iran by selling telecommunications products that use licensed US patents. The story is part of Huawei's difficult relations with the United States government and, more generally, in the so-called “trade war” initiated by US President Donald Trump against China and its products.
Meng is a very important person within Huawei, where he has worked since 1993. His arrest occurred in Vancouver while he was waiting for a connecting flight between two flights. The allegations against him were made by the New York District Attorney's Office, but neither the Justice Department nor Huawei itself have provided many other details.
Ben Sasse, Republican Senator from Nebraska , however, made some statements showing that he was informed about the affair, and claimed that Meng's arrest was carried out following the violation of US sanctions against Iran. According to Sasse, in recent months China “has worked to damage our national security interests, and the United States and our allies cannot stand by and observe. The Americans are grateful to our Canadian partners for having arrested the chief financial officer of a Chinese telecommunications giant, who violated US sanctions against Iran. “
Huawei is known in Europe especially for its its smartphones, among the first from the Chinese market to have had a good commercial success for their quality compared to the classic cheap mobile phones from Asia. However, the company is also very important in the telecommunications sector, for which it produces systems and equipment for data transmission and management. Many countries base part of their telecommunications networks – one of the most important strategic assets for a nation – on solutions produced by Huawei.
The United States has long accused Huawei of spying on behalf of the Chinese government and to sell its systems to countries such as Iran, Sudan, Syria and Cuba, on which they have imposed trade restrictions and sanctions. Some of the technologies used by Huawei derive from US patents, used under license, which therefore could not be sold to countries against which sanctions have been established. In recent months it was assumed that the United States was investigating Huawei precisely for its commercial activities in Iran.
Following the nuclear agreement, reached with difficulty and after a long negotiation during the second Obama administration, the United States had suspended most of the economic sanctions against Iran, softening relations with the country. The current US president, Donald Trump, immediately sided against Iran and Saudi Arabia, withdrew from the nuclear deal and again imposed sanctions on the country. This choice has complicated the commercial relations with Iran of numerous companies, which have recently returned to doing business with the country.
Meng's arrest took place on the same day that Trump was meeting the Chinese president, Xi Jinping, in Argentina on the occasion of the G20 organized last weekend. In their meeting, the two presidents agreed on a three-month truce on the initiation of new tariffs for reciprocal imports, hoping to find a trade agreement in the coming weeks to stop the introduction of new taxes on products sold by the two countries. In the following days, relations between the two countries deteriorated again, following some very aggressive tweets from Trump. The story of Meng and Huawei will probably add new elements of confrontation between the two countries.
The confrontation between the United States and China in the technology sector has become very close since Trump is president. Last March, citing national security reasons, the US government blocked a $ 117 billion offer from Broadcom, a Singapore-based microchip maker now headquartered in the US, interested in buying US competitor Qualcomm. A month later, the Commerce Department banned ZTE, China's second largest telecommunications system manufacturer, from accessing US-made components. In that case, the ban was motivated by arguing that ZTE had violated the sanctions imposed on Iran and North Korea. China responded by blocking much of ZTE's business in the United States, causing serious economic damage. Eventually, Trump stepped in to unlock the situation, giving new access to ZTE in exchange for paying a $ 1 billion fine, replacing some of its executives, and free access to its assets to inspect them.
