Huawei arrest: Justin Trudeau denies political motivation

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The arrest happened at about the same time that President Donald Trump dined with Chinese President Xi Jinping in Buenos Aires last Saturday (Dec 1) to discuss the trade war between the countries.

Financial markets are enduring further turmoil after the arrest of a Chinese Huawei executive on behalf of the U.S. exacerbated fears over the countries' trade war. USA intelligence agencies allege that Huawei is linked to China's government and that its equipment could contain "backdoors" for use by government spies. He said that would be a major subject of negotiations with China. "Oh my God, where is this going to lead?"

In latest, Canadian law enforcement has arrested Huawei CFO Wanzhou Meng from Vancouver while she was changing her flights.

The Dow Jones Industrial Average fell almost 400 points Thursday morning, or 1.5 percent, extending the week's losses after a Chinese telecom executive was arrested in Canada on behalf of the US, stoking growing fears about trade tensions with China.

Gordon Houlden, director of the China Institute at the University of Alberta, said Canada and the USA have an extradition treaty and Canada has obligations that not even the prime minister can change. US regulators also have moved to extend a crackdown on the company.

Canadian officials have jeopardized tighter trade ties with the world's second largest economy in arresting the heiress apparent of telecom giant Huawei Technologies, according to Chinese-Canadian relations experts monitoring the situation.

Donald Trump last month reinstated all the United States sanctions on Iran that had been removed under a 2015 nuclear deal.

The arrest of a top Chinese technology executive should have been a triumphant moment for the Trump administration.

Under Trump and his predecessor, Barack Obama, Washington has pressured European countries and other allies to limit use of Huawei's technology.

What has Canada said about the arrest?

The arrest drew an immediate and severe reaction from China, which demanded Meng be released immediately.

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"This headline is quite significant as the U.S. government is attempting to persuade allies to stop using Huawei equipment due to security fears", said Stephen Innes, head of Asia-Pacific trade at OANDA.

The case that adds to technology tensions with Washington and threatens to complicate trade talks. According to analysts, China has deployed predatory tactics, from forcing American and other foreign companies to hand over trade secrets in exchange for access to the Chinese market to engaging in cyber-theft. The report follows a decision by the USA this year to ban government purchases of Huawei gear.

Experts have warned that Meng's arrest could negatively impact trade negotiations between the USA and China, just as President Donald Trump has been hailing the success of a weekend meeting with Chinese counterpart Xi Jinping. Chinese technology has been a particular bugbear for the USA president, who has justified imposing tariffs on Chinese imports with allegations of intellectual property theft by Chinese companies. Trump restored access after ZTE agreed to pay a $1 billion fine, replace its executive team and embed a US -chosen compliance team in the company.

Huawei released a statement saying its CFO was arrested while changing planes in Vancouver and is facing charges in "the Eastern District of NY".

Dean Garfield, president of the U.S. Information Technology Industry Council trade group, said innovation by U.S. companies often depends utterly on product development and testing by Chinese partners, not to mention component suppliers.

Canadian Prime Minister Justin Trudeau has denied any involvement in the arrest of Huawei CFO and deputy chair Wanzhou Meng in Vancouver Airport this week. New Zealand and Australia already have. Several other past and present Skycom directors also appear to have connections to Huawei.

Huawei, the biggest global supplier of network gear used by phone and internet companies, has been the target of USA security organizations. A 2012 report by the House Intelligence Committee report urged US businesses to avoid their products and called for blocking all mergers or acquisitions involving them.

But Huawei is not alone in having to deal with privacy troubles.

Canadian officials said Meng faces possible extradition to the United States. "They may see that Canada has to do this, and the Canadian investment relationship is important".

Meanwhile, the substantially more independent South China Morning Post reported today that Meng and her father recently told Huawei employees that strict compliance with regulations was sometimes not financially feasible and could be avoided. He said arresting her without that violated her human rights.