The United States government is prepared to formally request the extradition of a top-ranking Huawei executive arrested in Vancouver early last month, as revealed by Canada's stateside envoy David MacNaughton.
In this week's interview with one Canadian publication, the ambassador confirmed what many industry watchers have been predicting for weeks now – the Department of Justice believes it has enough evidence to build a solid case against Meng Wanzhou, Huawei Chief Financial Officer that's been with the company since the mid-90s. And while her C-suite status gives the case a high-profile affair already, so does the fact she's one of the three children of Huawei founder Ren Zhengfei.
The 46-year-old had been arrested on December 1 on the request of the U.S. Department of Justice and made bail equivalent to $7.5 million ten days later. She's been under limited house arrest ever since, with Washington-based regulators having until January 30 — i.e. next Wednesday — to formally submit their request. While Mr. MacNaughton said he isn't aware when exactly is the DOJ planning to officially do so, that move is hence imminent. It's also possible stateside prosecutors are waiting until the very last day to do so in order to buy more time for their investigation to gather additional evidence.
How the Middle East and puppetry fit together
Ms. Meng's next court appearance is scheduled for February 6, when she's likely to make her first official case against the U.S. extradition request. Huawei claims it's not aware of any wrongdoing on its CFO's part, though it's also denying the existence of well-documented and profound relationships with two now-defunct companies formerly operating in the Middle East that Ms. Meng is believed to have used in an effort to circumvent international trade sanctions.
While Huawei is suggesting the case has strong political connotations, China's communist government is openly claiming so, going as far as to call Canada a U.S. puppet by referring to it as "the 51st state." Beijing is using diplomatic channels in order to ensure the entire world hears that message and also took to detaining Canadians since Ms. Meng's arrest. While China's officials are claiming those cases are unrelated, Western diplomatic circles' reaction to that story range from public skepticism and suspicion to outright disbelief. In response, China threatened (more) "consequences" are on the way if the other side doesn't ensure the executive's unconditional release.
The entirety of China's argument about the arrest and incoming due process rests upon the notion that the move against the executive is motivated by the rising tensions between the U.S. and China over trade, i.e. that allegations about any anti-embargo activity are being made with little to no legal basis and in bad faith. Politically motivated extraditions are illegal under international law, though even if that was the case with the current ordeal, all of the world's superpowers repeatedly demonstrated they'll only adhere with such loose legal concepts when such actions are in their direct interest, independent of any specific historical periods and political ideologies.
President Donald Trump didn't help lower the controversy after he publicly stated he'd intervene in the DOJ's work pertaining to Ms. Meng if he believed doing so would help his administration gain additional leverage in its ongoing trade negotiations with the Far Eastern country. China saw that as an admission of systematic bias within the U.S. judicial system which it's now claiming is primarily serving the federal government's agenda and isn't interested in delivering actual justice. Few Washington officials even bothered remarking on those accusations but those that did simply called them frivolous.
Why Huawei shouldn't act surprised
Many industry watchers are now arguing Huawei should have seen this kind of trouble coming given the extremely problematic nature of its history with the U.S. If even a small portion of what the company previously claimed about the American government in regards to allegations of ill-intended and unwarranted moves aimed at curbing China's economy is true, it should have viewed the possibility of bogus legal action against its high-profile executives as a realistic threat.
On the other hand, if it was aware of Ms. Meng's involvement in a conspiracy to commit bank fraud with the goal of violating U.S. trade sanctions placed on Iran, the very recent example of ZTE already showed Washington doesn't care who the perpetrator is if the Commerce Department says someone isn't playing ball. A company that's directly owned by a state firm and hence has even closer ties to Beijing than Huawei, it was nearly obliterated by sanctions last year after it became clear U.S. regulators can prove its wrongdoing and inability to adhere with official settlement conditions. A personal intervention from President Trump is what it took to provide ZTE with a lifeline and given how Washington's distrust toward Huawei is even stronger, Ms. Meng's case is unlikely to be simpler to defuse if the accusations against her have any basis in reality.
While it's possible Ms. Meng is guilty of some or all of the alleged wrongdoing without any part of the remaining Huawei leadership having knowledge of her activities, the fact that no senior executive at the tech juggernaut would directly profit from international commerce crimes suggests her supposed scheme was a systematic effort on the part of the company as individual perpetrators would hardly have the motive for them otherwise.
Whatever happens, you personally will lose
As the situation now appears to be on an escalation course, it's unlikely Huawei will have the ability to expand its stateside presence — something it's been craving to do for many years now — anytime soon. In terms of consumers electronics, that means American consumers will be left without the ability to (easily) pick up some of the highest-rated and aggressively priced smartphones, tablets, and laptops released in recent years.
At the same time, the U.S. economy as a whole is greatly threatened by China, largely due to many proven cases of trade secret theft and other transgressions (like embargo violations) on the part of both state-sponsored and private actors from the country, so curbing any such illegal activity should still be in the best long-term interest of American consumers. What remains to be seen is whether the U.S. government will be able to convince them of that notion when faced with questions of why is the domestic electronics market becoming less competitive as a result of its trade war with the world's second-largest economy.