Dec 9, 2018

Huawei CFO's arrest shakes up Trump's trade war truce with China

Photo: Steve Parsons/PA Images via Getty Images

The broad trajectory of the stock market last week can be explained pretty simply.

What happened: A Monday spike on optimism about a trade truce between China and America, followed by a downward spiral after news emerged that seemed to indicate the trade war continues to be prosecuted aggressively.

  • Meng Wanzhou, the CFO of Chinese telco Huawei, appeared in a high-security Vancouver courtroom Friday, facing extradition to the U.S. on fraud charges.
  • China came to Huawei's defense, with state media saying that the U.S. was behaving like a "despicable rogue." China is treating this as an attack by one sovereign on another.
  • Huawei, which made $7 billion last year on revenues of $19 billion, has been effectively banned from selling many of its products in the U.S., Australia and New Zealand.

Canada won't arrest and extradite foreign citizens for violating U.S. sanctions, but it will arrest and extradite foreign citizens for committing fraud. Meng was arrested on the basis of a 2013 PowerPoint presentation she made to HSBC, in which she said there was no relationship between Huawei and Skycom, which was doing business in Iran. That statement, if untrue, can be seen as an attempt to fraudulently mislead HSBC.

  • These kind of arrests are rare, but far from unheard-of. America is well-versed in using international criminal law to advance its foreign policy, and directors of foreign companies are often caught complainingthat the U.S. should not be able to prosecute actions taken abroad that were entirely legal in the place where they happened.
  • The timing of Meng's arrest could hardly have been worse. It's pure coincidence that Meng was arrested on the same day that Trump had his friendly dinner with Chinese President Xi Jinping. Now all of that goodwill seems like a thing of the distant past.

The big question: "The Justice department and the Trump administration have an important question to answer: What do we want out of this?" writes Bloomberg's Tim Culpan. "It’s not clear that they know."

The bottom line: Meng's fate could have multitrillion-dollar geopolitical implications, especially if China retaliates by arresting American executives. For the time being, however, the trade talks are still on.

Go deeper: Canada tumbles into the middle of the U.S.-China trade war.

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U.S. coronavirus updates: Largest 24-hour spike in fatalities

Data: The Center for Systems Science and Engineering at Johns Hopkins; Map: Andrew Witherspoon/Axios

New York's death toll from the novel coronavirus surged to its highest one-day total on Tuesday, as the U.S. saw its largest 24-hour spike in fatalities, per Johns Hopkins data. Recorded deaths across the U.S. surpassed 12,900 early Wednesday.

Why it matters: State officials have stressed that lockdowns must continue even if cities begin to see slight improvements from social distancing. Several hot spots, including New York, New Orleans, and Detroit, are expected to peak in the coming days.

Go deeperArrowUpdated 7 mins ago - Health

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Global: Total confirmed cases as of 12:30 a.m. ET: 1,430,453 — Total deaths: 82,133 — Total recoveries: 301,385Map.
  2. U.S.: Total confirmed cases as of 12:30 a.m. ET: 399,081 — Total deaths: 12,907 — Total recoveries: 22,461Map.
  3. Federal government latest: Acting Navy secretary resigns over handling of virus-infected ship — Trump removes watchdog overseeing rollout of $2 trillion coronavirus bill — Trump said he "didn't see" memos from his trade adviser Peter Navarro warning that the crisis could kill more than half a million Americans.
  4. States latest: California Gov. Gavin Newsom is confident that more than 200 million masks will be delivered to the state "at a monthly basis starting in the next few weeks."
  5. Business latest: America's food heroes in times of the coronavirus crisis. Even when the economy comes back to life, huge questions for airlines will remain.
  6. World updates: China reopens Wuhan after 10-week coronavirus lockdown.
  7. 2020 latest: Polls for Wisconsin's primary elections closed at 9 p.m. ET Tuesday, but results won't be released until April 13. Thousands of residents cast ballots in person.
  8. 1 Olympics thing: About 6,500 athletes who qualified for the Tokyo Games will keep their spots in 2021.
  9. What should I do? Pets, moving and personal healthAnswers about the virus from Axios expertsWhat to know about social distancingQ&A: Minimizing your coronavirus risk.
  10. Other resources: CDC on how to avoid the virus, what to do if you get it.

Subscribe to Mike Allen's Axios AM to follow our coronavirus coverage each morning from your inbox.

African Americans are disproportionately dying from coronavirus

U.S. Surgeon General Jerome Adams at a Coronavirus Task Force Press news briefing. Photo: Michael Brochstein/Echoes Wire/Barcroft Media via Getty Images

U.S. Surgeon General Jerome Adams has highlighted the disproportionate impact the novel coronavirus is having on African American communities, telling CBS Tuesday "many black Americans are at higher risk for COVID."

Driving the news: Several states and cities have reported that African Americans are dying from the virus at higher rates than any other racial demographic. Not all agencies have released a breakdown of data, but the virus is spiking in cities with large African American populations, including New York, Chicago, Detroit, Milwaukee and New Orleans.

Go deeperArrow2 hours ago - Health