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Huawei CFO’s arrest could impact U.S.-China trade talks

Huawei CFO’s arrest could impact U.S.-China trade talks

Posted December. 11, 2018 08:56,   

Updated December. 11, 2018 08:56

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Meng Wanzhou, Huawei Technologies' chief financial officer and the daughter of the company's founder, has been arrested in Canada on charges of violating U.S. sanctions against Iran, and her arrest is stirring a ripple effect on the on-going trade talks between Washington and Beijing. Meng’s arrest is fast emerging as a tinder box that could rupture the current talks, after the two countries agreed to a temporary 90-day truce at the summit meeting in Argentina on December 1.

"As far as I'm concerned, it's a hard deadline," said U.S. Trade Representative Robert Lighthizer during his CBS interview on Sunday (local time). "When I talked to the president of the United States, he's not talking about going beyond March.” He stressed that at the end of 90 days, the tariffs will be raised.

When asked if President Donald Trump had known about the arrest during his summit dinner with President Xi Jinping, Lighthizer denied such a possibility, emphasizing that trade talks must not be affected by Meng’s arrest.

However, many experts are of the view that the CFO’s arrest will have a negative impact on the talks between the U.S. and China. “Ms. Meng’s detention has considerably complicated China’s economic relations with the United States,” said the New York Times, adding that it has ignited anger and astonishment in China, where Huawei is a source of national price. “The imbroglio has produced a nationalist backlash in China that could make it difficult for Mr. Xi to make concessions to the U.S.,” reported the Wall Street Journal.

A day after calling in the Canadian envoy stationed in China for protest, the Chinese foreign ministry summoned U.S. Ambassador to China Terry Branstad to have the arrest warrant revoked. “The actions of the U.S. seriously violated the lawful and legitimate rights of the Chinese citizen,” said Vice Foreign Minister Le Yucheng in a statement, adding that Beijing will take additional measures depending on the future actions of Washington.

Canada has also made a response, canceling a trade mission’s trip to China. The province of British Columbia issued a statement that it has suspended the China leg of its Asian forestry trade mission due to the international judicial process relating to Huawei’s chief financial officer.

Pundits say that the intransigence between the world’s largest economies is likely to be prolonged as the economic alliance between the U.S. and Canada is fully aligned, and China is showing no signs of backtracking. There is a possibility that China could detain Canadians as a retaliatory measure, the AP reported.


Jeong-Hun Park sunshade@donga.com