China demanded on Thursday that Canadian authorities release Meng, who faces possible extradition to the U.S. The Chinese embassy in Ottawa said Meng's human rights were being violated and demanded her immediate release.
He also said the USA government has been "concerned" about Huawei potentially stealing American intellectual property - an issue that's been a centerpiece of the U.S-China trade disputes. He declined to give further details, citing Meng's bail hearing on Friday.
US authorities have been probing Huawei, one of the world's largest makers of telecommunications network equipment, since at least 2016 over allegations that it shipped USA -derived tech products to Iran and other countries in violation of USA export and sanctions laws, sources told Reuters in April. Huawei has been banned from helping build fundamental communications infrastructure in some western countries, including 5G telecom service, over fears that it leaves those countries vulnerable to espionage on behalf of the Chinese government.
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. "I think US executives in the tech space should be afraid".
"So not respecting this particular arrest, but Huawei is one company we've been concerned about", he said. 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. It has recently faced controversy in America after some US officials alleged that its products are being used for spying.
"Recently, our corporate CFO, Ms. Meng Wanzhou, was provisionally detained by the Canadian Authorities on behalf of the United States of America, which seeks the extradition of Ms. Meng Wanzhou to face unspecified charges in the Eastern District of NY, when she was transferring flights in Canada", the statement reads.
The arrest is believed to be related to alleged violations of United States sanctions though there has been no official statement from Washington.
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".
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The U.S.is anxious about the extent to which Chinese-made equipment is used in the telecommunications sectors of countries that host American military bases. Trump and Xi have been battling over tariffs, something that has set the US financial markets into a tailspin this week, causing the Dow to drop almost 800 points on Tuesday.
Huawei has said it complies with all applicable export control and sanctions laws and US and other regulations.
The arrest took place on the same day Trump met with Chinese President Xi Jinping to discuss the trade war after the close of the G-20 summit in Argentina. Mr Trump was slated to raise additional tariffs on $200bn of Chinese goods from 10 per cent to 25 per cent on 1 January. Markets are already incredibly nervous over slowing economic growth thanks to the inverted U.S. yield curve. He said his office got "a few days' notice that this was in the works" but he emphasized the actions of law enforcement officials are independent from politics. "We certainly don't inform the President on every one of them".
The charges remain unknown due to a court restriction but the USA has been investigating Huawei over possible violation of Iran sanctions.
It also produces consumer electronics and this year overtook Apple to become the second-largest manufacturer of smartphones in the world, behind Samsung Electronics.
U.S. Senator Ben Sasse praised the move and said that it was "for breaking U.S. sanctions against Iran".
CNN, quoting an unnamed official, said that the United States saw the arrest as providing leverage in trade talks.
Canadian officials said Meng faces possible extradition to the United States.