Huawei’s Global CFO’s Arrest Will Affect Trade War Says Eurasia Group

Canada’s Department of Justice announced this week that Canada had arrested Meng Wanzhou in Vancouver, the global CFO of Huawei, a Chinese multinational telecommunications-equipment and consumer-electronics company.

The arrest was in relation to violations of U.S. sanctions according to a source who spoke to Reuters. Wanzhou now faces extradition to the United States.

According to risk consultancy Eurasia Group, her arrest will damage the trade negotiations between the U.S. and China.

“Beijing is likely to react angrily to this latest arrest of a Chinese citizen in a third country for violating U.S. law,” Eurasia analysts remarked.

Global Times responded to the arrest by posting on Twitter, stating, “China should be fully prepared for an escalation in the #tradewar with the US, as the US will not ease its stance on China, and the recent arrest of the senior executive of #Huawei is a vivid example.”

“Coupled with other pending actions the administration is considering, such as announcing that China is in breach of the 2015 (Barack) Obama-Xi agreement on cyber theft of IP (intellectual property) and trade secrets — which will likely be accompanied by sanctions against Chinese companies that benefited from IP theft — this type of action will affect the atmosphere around the negotiations — making them less likely to bring a sustainable settlement, ” the Eurasia Group analysts also said.

Huawei has said that it is “not aware of any wrongdoing by Ms. Meng.”