Trade Talks Between US and China Will Continue Despite Arrest of Huawei’s CFO

The repercussion following the arrest of Huawei’s chief financial officer in Canada amid the ongoing Sino-U.S. trade war is going to be minimal, following comments by officials from both the United States and China.

Meng Wanzhou, Huawei’s CFO and daughter of the company’s founder Ren Zhengfei, was arrested in Vancouver on Dec. 1 at the request of the U.S. law enforcement, on the suspicion that she violated U.S. trade sanctions against Iran.

On the day Meng was arrested, U.S. President Donald Trump and Chinese leader Xi Jinping met at the sideline of the G20 summit in Buenos Aires, Argentina and both leaders agreed to halt the trade dispute for 90 days starting on Dec. 1. Meng now faces extradition to the United States.

There are speculations that Meng’s arrest could potentially unravel any progress in the Sino-U.S. trade war because of her father’s strong ties to the Chinese Communist Party (CCP). Ren, a former director of the People’s Liberation Army (PLA) General Staff Department Information Engineering, was in charge of telecom research for the PLA before founding Huawei.

Despite these speculations, the trade ceasefire agreed by the two leaders continues to be on track.

Gao Feng, a spokesperson for China’s Ministry of Commerce, said at a press conference on Dec. 6 that the meeting between Trump and Xi in Argentina was a success, and the two leaders have reached important consensus. Additionally, Gao said communication between China and the United States is smooth and “we (China) are confident about reaching an agreement in the next 90 days.”

U.S. Senator Marco Rubio (R-Fla.) wrote on his Twitter account on Dec. 6 that Meng’s arrest “has nothing to do” with the trade war.

Rubio added, “It’s an action by federal prosecutors for alleged violations of law, not leverage in a trade dispute. And unlike China, she will have the presumption of innocence until proven otherwise.”

National Security Adviser John Bolton, in an interview with U.S.-based National Public Radio (NPR) on Dec. 6, stated that he knew in advance that the arrest was coming from the Justice Department. Bolton added that he didn’t know if Trump knew about the arrest before it happened, given that “these kinds of things happen with some frequency … we certainly don’t inform the president on every one of them.”

An unnamed U.S. official on Dec. 7 told Reuters that it was a “Justice Department matter and not orchestrated in advance by the White House.” The unnamed White House official also told Reuters that Trump did not know about Meng’s arrest before meeting with Xi in Argentina.

White House trade and economic adviser Peter Navarro, while voicing optimism about Sino-U.S. trade talks, warned that Beijing “has a long record of breaking its promise on trade,” he said in a recent interview with Voice of America (VOA).

“What we’re demanding is that China obey the rules of the international road, and become a fair actor in international trade, and surely that will require a restructuring of the model that’s now predicated on state-owned enterprises, protectionism, mercantilism,” Navarro stated.

Beijing is known to have violated its World Trade Organization (WTO) commitments by providing hefty subsidies to domestic industries and supporting state-owned companies, while enforcing policies favorable to Chinese companies, such as pressing foreign companies doing businesses in China to transfer their intellectual property to domestic joint ventures.

Hong Kong’s media HK01 pointed out that if Meng was found guilty of violating U.S. sanctions on Iran, she could be sentenced to up to 20 years in prison, under the Iranian Transactions and Sanctions Regulations (ITSR).