Top Huawei executive arrested on suspicion of violating Iran sanctions

Huawei chief financial officer Wanzhou Meng is facing extradition to the United States after being arrested in Canada on suspicion of violating U.S. sanctions on Iran, the Globe and Mail reports.

Why it matters: A court hearing has been set for Friday. If Meng is extradited, it will mark the first time a Huawei official will face U.S. authorities.

The backdrop: Chinese phone makers Huawei and ZTE have been suspected of repeatedly violating U.S. sanctions on Iran and North Korea. In July, President Trump reversed a ban on American companies doing business with ZTE in order to pave the way for trade talks with Chinese President Xi Jinping.

Worth noting: Meng was arrested on Dec. 1 — the same day Trump and Xi negotiated a temporary ceasefire in the U.S.-China trade war.

Our thought bubble, via Axios contributor Bill Bishop: This move can not be overstated. If the U.S. says Huawei violated Iran sanctions, like ZTE did, a ZTE-like ban for U.S. suppliers to Huawei is not impossible. It may not go that far, but expect investors to shoot first Thursday and dump shares of big Huawei suppliers, as they did with ZTE.

Go deeper: After Huawei arrest, experts say China could retaliate