Huawei CFO is arrested in Canada over Iran links

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Wanzhou Meng, who is also the daughter of company founder Ren Zhengfei, is facing extradition orders to the USA on suspicion of violating trade sanctions against Iran. China called for Meng's immediate release.

Foreign ministry spokesman Geng Shuang told reporters Thursday that the Chinese government also wants Canadian officials to reveal the reasoning behind Meng Wanzhou's arrest Saturday.

Both Huawei and ZTE Corp. have faced trouble with the USA and other governments over dealings with Iran and fears the Chinese companies' equipment might be used for spying.

James Lewis, the director of technology policy at the Center for Strategic and International Studies, told Axios the US should be prepared for a backlash and warned American tech executives to steer clear of China for now.

The arrest of a senior Huawei telecoms executive in Canada this week brought the Chinese company under global scrutiny, drew the ire of American leaders and sent stocks plummeting over fears that a U.S-China trade deal could be reneged amid newly inflamed tensions. He also claimed that the incident "will seriously impact China and the USA implementing consensus reached between two state leaders".

The company is the world's second-largest telecommunications equipment and service provider, after South Korea's Samsung, and recently surpassed Apple.

Meanwhile, the Canadian president Justin Trudeau declined to give more details on the swoop, in light of Meng's bail hearing on Friday, other than to say there was no political involvement. The U.S. Justice Department has refused comment.

Growing tensions between the USA and China, Russia, and North Korea have caused global concern.

The handset and telecommunications equipment maker said it complies with all applicable export control and sanctions laws and USA and other regulations.

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"We have made solemn representations to Canada and the USA, demanding that both parties immediately clarify the reasons for the detention, and immediately release the detainee to protect the person's legal rights".

Meng's arrest has "potentially huge implications" for the trade war and signals the U.S. government is willing to get tough on Chinese companies that do business with Iran, according to Michael Every, head of Asia-Pacific research at investment bank Rabobank. Under Trump and his predecessor, Barack Obama, Washington has pressured European countries and other allies to limit use of its technology.

The bond market "has reignited the debate about what, if anything, the yield curve tells us about the prospects for the United States economy and the stock market", noted Oliver Jones, markets economist at Capital Economics, in a research note. In August, Australia banned the company from working on the country's fifth-generation network due to security concerns. Fears have been raised that the company's mobile phones and networking equipment could create powerful espionage tools for Beijing. In a statement Wednesday, Huawei said it has been provided "very little information" regarding the charges.

This year has also seen the eruption of trade tensions between the USA and China.

In exchange, ZTE agreed to pay a hefty $1 billion fine and put an additional $400 million in escrow in case of future violations.

"That's something we should be watching out for".

Mulroney said Canada should be prepared for "sustained fury" from the Chinese and said it will be portrayed in China as Canada kowtowing to Trump. "It's a possibility. China plays rough", Mulroney said. Huawei is by far China's most global technology company, with operations spanning Africa, Europe and Asia.

This arrest could materially damage the relationship between the USA and China at possibly one of the most sensitive times between the two countries in their long and torrid history. Best Buy has even halted sales of Huawei devices completely in the U.S.

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