Now a new story is wreaking havoc on the stock markets. Canada has arrested the CFO of Huawei, angering the Chinese government and raising concerns for trade again.
Worldwide stock markets were optimistic on Monday, after it was announced that President Trump and Chinese President Xi Jinping had come to some positive high-level agreements on trade, seemingly guaranteeing future negotiations.
The confidence from Monday quickly disappeared as investors realized that the initial talks were not a true indicator of progress. The trade situation remains tense.
Canada Plans to Extradite Huawei CFO to the United States
Canadian authorities took Meng Wanzhou into custody this week, acting on request of the US government. Meng is the Chief Financial Officer of Chinese telecommunications company Huawei, one of the world’s largest cellular equipment and smartphone manufacturers.
The US is seeking extradition so that Meng can be presented at the Eastern District Federal Court of New York. Both the Canadian and US Justice Departments have declined to share any information regarding the case.
Huawei released a statement saying that “The company has been provided very little information regarding the charges and is not aware of any wrongdoing by Ms. Meng. The company believes the Canadian and US legal systems will ultimately reach a just conclusion. Huawei complies with all applicable laws and regulations where it operates, including applicable export control and sanction laws and regulations of the UN, US, and EU”
It is believed that Meng could be facing charges in relation to sanctions violations. Earlier this year, the Wall Street Journal reported that the Justice Department was working to determine whether it had breached existing sanctions on Iran.
The Chinese Embassy released a statement on behalf of the government, saying that “We will closely follow the development of the issue and take all measures to resolutely protect the legitimate rights and interests of Chinese citizens.”
Huawei an Important Company for the Chinese Government
Although privately owned, Huawei has close ties to the Chinese government. It is the largest manufacturer of cellular infrastructure equipment and the second largest smartphone manufacturer behind Apple. It’s often seen as the ultimate example of a successful Chinese business.
Asian stock markets fell after the arrest was made public, as did stock markets in the US
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