Extradition of the Telecom Giant’s Executive: Huawei in the midst of the Trade War
December 14, 2018
Chinese telecom giant Huawei's chief financial officer and deputy chair, Meng Wanzhou, was arrested in Vancouver on December 1, 2018, to be extradited per US’s request. While the US has been investigating Huawei over violation of sanctions against Iran, President Trump did not receive any brief about the arrest prior. Meng, daughter of Huawei’s founder Ren Zhengfei has been a prominent figure in the Chinese economy. Her arrest came at a sensitive time just days after Trump and Xi Jinping agreed to a trade war truce at the G20 summit end of November 2018. US and China, engaged in a trade war, have imposed duties of billions of dollars on one another's goods lately.
China's embassy in Canada protested at the arrest and demanded Meng’s release. Her detention occurred when she was changing planes -- the Chinese called it wrong-doing, while the US justice department in the Eastern District of New York -- which Huawei said had brought the charges -- declined to comment. Subsequently at the bail hearing in Vancouver, the charges stated how Ms. Meng may have participated in a scheme to trick financial institutions into making transactions that violated United States sanctions against Iran. John Gibb-Carsley, an attorney with Canada’s Justice Department, said that between 2009 and 2014, Huawei used a Hong Kong company, Skycom Tech, to make transactions with telecom companies in Iran, violating US sanctions. Meng claimed Huawei operated in Iran in strict compliance with US sanctions, and that Huawei’s engagement with Skycom was part of normal business operations. She was granted bail by the Canadian court on December 11.
Meanwhile, western countries have been restricting the use of Huawei technology: US, Australia and New Zealand have blocked its equipment in infrastructure for new faster 5G mobile networks. BT, which dominates the UK's telecoms network, said it would not use the Chinese firm's equipment in its key 5G infrastructure. US lawmakers have repeatedly accused Huawei of being a threat to US national security, arguing that its technology could be used for spying by the Chinese government.
Notably Huawei is one of the largest telecommunications equipment and services providers in the world, recently passing Apple in smartphone manufacturing, second only to Samsung. The problem with Huawei is not only that they probably are pirating US technology, but the fact that they are technologically advanced. Furthermore, they provide solutions that are affordable and thus are becoming a threat to the West. If the purpose of the trade war is to attract talent/resources and gain economic advantages, western governments must create their competition edges. Detaining or extraditing executives with or without legitimate reasons will ultimately resemble building a wall around a country forcefully and impetuously. No real solutions to pirating or spying will likely materialize.