Why Huawei's CFO Arrest Has Intensified US-China Trade War?

A month before her arrest, Meng Wanzhou was supposed to take the role of vice-chairperson in the Chinese telecom giant

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Former Correspondent, Entrepreneur Asia Pacific
2 min read


On December 1, the scion of Huawei family and chief financial officer of the Chinese telecom giant was arrested by Canadian officials at Vancouver airport while she was switching her flight for Mexico.  The authorities arrested her on the request of US officials over the suspicion of violating US sanctions on Iran.

Chinese stocks crashed after Meng was detained by officials in Canada on December 13. Shares of Huawei’s main rival ZTE nose-dived nearly 6 percent in Hong Kong by midday. Meng’s news also hit the suppliers of employee-owned Huawei across the Asian stock markets. Among the worst performers is Shennan Circuit, which slipped nearly 10 percent in Shenzhen as of this writing, according to the Hang Seng China Enterprises Index.

Beijing summoned the American ambassador to China and demanded the United States to arrange the release of Meng.

On 17 December, Meng was freed on bail after paying $7.5 million, for the misdeeds allegedly committed a decade ago. According to reports, Meng was working with an unofficial subsidiary of Huawei called “Skycom” to transact business in Iran with Iranian telecommunication companies. The United States had alleged Meng of hiding ties between Huawei and Skycom and violating US trade sanctions in Iran. As Meng is extradited to US, Canada was presenting the case against Meng on the behalf of the US.

Her arrest created a stir and made a direct impact on the ongoing trade war between the United States and People’s Republic of China. Why?

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