Huawei CFO’s arrest renews US-China trade fears
Dow futures slide after the arrest of Huawei CFO Meng Wanzhou in Canada; Doug McKelway reports from the White House.
China has warned Canada it will face severe consequences unless it releases Huawei Technologies’ chief financial officer Meng Wanzhou, who faces extradition to the U.S. after being arrested in the country last week.
Meng, 46, was taken into custody on Saturday, Dec. 1, 2018, on behalf of the U.S., while she was transferring flights in Vancouver, the tech company said. She’s accused of trying to evade U.S. sanctions on Iran. She is the daughter of Huawei founder Ren Zhengfei, a former Chinese military engineer worth $3.2 billion, according to Forbes magazine.
During her bail hearing on Friday, a prosecutor for the Canadian government said U.S. charges against her have to do with Huawei using an unofficial subsidiary to access the Iran market in dealings that would contravene U.S. sanctions. The prosecutor said she is accused of fraud.
If extradited to the U.S., she could face charges of “conspiracy to defraud multiple financial institutions,” which holds a “maximum sentence of 30 years for each charge,” Reuters reported.
HUAWEI CFO MENG WANZHOU’S ARREST MAY PROMPT CHINA TO RETALIATE, ‘TAKE HOSTAGES,’ EXPERT SAYS
Vice Foreign Minister Le Yucheng summoned the Canadian ambassador in Beijing and “lodged a strong protest,” a statement from China’s Foreign Ministry stated. The ministry called Meng’s arrest “extremely nasty.”
Meng Wanzhou, right, attends a bail hearing at British Columbia Supreme Court in Vancouver on Friday, Dec. 7, 2018.
“China strongly urges the Canadian side to immediately release the detained person, and earnestly protect their lawful, legitimate rights, otherwise Canada must accept full responsibility for the serious consequences caused,” a statement from Le stated.
It was not immediately clear what the consequences would entail.
David Mulroney, a former Canadian ambassador to China, said the consequences would probably have to do with trade.
HUAWEI TECHNOLOGIES CFO ARRESTED IN CANADA, ACCUSED OF VIOLATING IRAN SANCTIONS
“The ability to talk about free trade will be put in the icebox for a while. But we’re going to have to live with that,” Mulroney said, according to Reuters. “That’s the price of dealing with a country like China.”
Chinese officials blasted Meng’s arrested, and experts warned more forceful actions could be coming.
The chief financial officer of China’s Huawei Technologies was arrested in Canada on Saturday, Dec. 1, 2018.
James Lewis, the director of technology policy at the Center for Strategic and International Studies, told Axios the U.S. should be prepared for a backlash and warned American tech executives to steer clear of China for now.
"If I was an American tech executive, I wouldn't travel to China this week," warned Lewis, who labeled Huawei "one of the Chinese government's pet companies" and charged the communist country's leaders wouldn't be afraid to "take hostages."
Meng will spend the weekend in jail after a Canadian judge said Friday that he needs to weigh her proposed bail conditions. The bail hearing continues Monday.
Fox News’ Katherine Lam and the Associated Press contributed to this report.
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