Huawei founder’s daughter arrested on US request, puts trade war truce in doubt

VANCOUVER/WASHINGTON (Reuters): The daughter of Chinese tech giant Huawei’s founder has been arrested in Canada and is facing extradition to the United States, dealing a blow to hopes of any easing of Sino-US trade tensions and rocking global stock markets.

The shock arrest of Meng Wanzhou, who is also Huawei Technologies Co. Ltd.’s chief financial officer, is riling authorities in Beijing and raises fresh doubts over a 90-day truce on trade struck between Presidents Donald Trump and Xi Jinping on the day she was detained.

The arrest is related to violations of US sanctions, a person familiar with the matter said. Reuters was unable to determine the precise nature of the violations.

The arrest and any potential sanctions on the world’s second biggest smartphone maker could have major repercussions on the global technology supply chain. Shares in Asian suppliers to Huawei, which also counts Qualcomm Inc. and Intel among its major suppliers, tumbled on Thursday.

Meng, one of the vice chairs on the company’s board and the daughter of company founder Ren Zhengfei, was arrested on Dec. 1 at the request of US authorities and a court hearing has been set for Friday, a Canadian Justice Department spokesman said. Trump and Xi had dined in Argentina on Dec. 1 at the G20 summit.

Sources told Reuters in April that US authorities have been probing Huawei, the world’s largest telecoms equipment maker, since at least 2016 for allegedly shipping US-origin products to Iran and other countries in violation of US export and sanctions laws.

Huawei confirmed the arrest in a statement and said that it has been provided little information of the charges, adding that it was “not aware of any wrongdoing by Ms. Meng”.

She was detained when she was transferring flights in Canada, it added.

China’s embassy in Canada said it resolutely opposed the arrest and called for Meng’s immediate release.

The US Justice Department on Wednesday declined to comment. A spokesman for the US attorney’s office in Brooklyn also declined to comment.

The arrest drew a sharp response from Chinese media and on the mainland’s social media.

“I am shocked. The US can’t beat Huawei in the market. Don’t act like a despicable rogue,” Tweeted Hu Xijin, editor of the Global Times, a nationalistic tabloid run by the ruling Communist Party’s People’s Daily.

Jia Wenshan, a professor at Chapman University in California, said the arrest was part of a broader geo-political strategy from the Trump administration to counter China and it “runs a huge risk of derailing the US-China trade talks”.

A user of China’s Twitter-like Weibo platform said Chinese should boycott products made by US tech giant Apple Inc. and instead buy Huawei products to show support for one of China’s national champions.

The probe of Huawei is similar to one that threatened the survival of China’s ZTE Corp, which pleaded guilty in 2017 to violating US laws that restrict the sale of American-made technology to Iran.

Earlier this year, the United States banned American firms from selling parts and software to ZTE, which then paid $1 billion this summer as part of a deal to get the ban lifted.