How Chinese Tech Giant Huawei Is Heating Up The Trade War With China

Published on December 14, 2018

In the midst of a supposed “agreement” between Chinese and US Governments over the trade war, one Chinese tech company is causing a lot of problems. Meng Wanzhou, the CFO of Chinese cell phone giant Huawei, was arrested in Canada last week after being accused of selling equipment to Iran despite heavy sanctions against trade with the Middle Eastern country.

The Arrest of Meng Wanzhou

Huawei has been banned in several countries, including the United States, citing a threat to national security. China has threatened that it would retaliate against both the US and Canada if Wanzhou isn’t released immediately.

Meng Wanzhou is being charged with conspiracy to defraud multiple financial institutions after she covered up her association with a company that tried to sell US-made equipment to the Iranian government despite heavy sanctions.

The allegations go back to 2013, when Wanzhou allegedly used the Hong Kong based company SkyCom, which is associated with Huawei, to sell equipment to Iran. Wanzhou tried to convince bankers that SkyCom and Huawei are not associated, but the company has been shipping US-made products to Iran illegally for years now.

International Bans

Overall distrust in Huawei isn’t coming solely from the US. The tech giant has been banned in several countries, including New Zealand, for the same reasons. The company is privately owned, which poses a threat to national security. The company does not have to report to any specific intelligence agency.

Sanctions against companies that are deemed a security threat were put in place back in April. So there’s a reason you’ve probably never heard of Huawei if you’re from the US. Australia has also banned Huawei, as well as another Chinese mobile phone company called ZTE for the same reasons. Both companies are banned in the US.

In the wake of Wanzhou’s arrest, the Chinese government has threatened “severe consequences” if she isn’t released immediately. Wanzhou faces extradition to the US for her crimes. Meanwhile, the Canadian government has charged her with up to 30 years per crime if she is convicted. She was arrested in Vancouver, and has allegedly used 7 passports, at least, over the last decade. The CFO is also the daughter of the founder of Huawei.

Trade With China

The stock market between US and Chinese companies have already seen a bit of a drop. China hasn’t said exactly how it would retaliate if Canada does not comply with their requests. The country has warned that the consequences would not be good.

Canada has not said if or when it will release the Huawei CFO, Meng Wanzhou. Experts on Chinese trade have said that the case will probably put a hold on any compromise between trade tariff agreements between countries like the US and Canada with China. Because the trade war has been going on so long, companies are hoping that the US and China can come to some type of agreement as quickly as possible.


Julia Sachs is a former Managing Editor at Grit Daily. She covers technology, social media and disinformation. She is based in Utah and before the pandemic she liked to travel.

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