1 big thing: Canada caught between U.S. and China
The freshest battleground in the U.S.-China trade war is currently playing out in Canada, where the CFO of Huawei faces extradition for allegedly violating U.S. sanctions on Iran.
Why it matters: This is both deeply personal (CFO Wanzhou Meng is the daughter of Huawei's founder) and precarious, given the accusations. The U.S. nearly gave ZTE a death sentence for similar allegations earlier this year, before President Trump backed off.
The allegations, per the NYT:
- From "2009 and 2014, Huawei used a Hong Kong company called Skycom Tech to make transactions in Iran and do business with telecom companies there, in violation of American sanctions against Iran."
- "Banks in the United States cleared financial transactions for Huawei, inadvertently doing business with Skycom, he said."
- "The banks were 'victim institutions' of fraud," Canadian prosecutors said.
- Flashback to 2013: "Exclusive: Huawei CFO linked to firm that offered HP gear to Iran" (Reuters)
Between the lines, via Axios China's Bill Bishop:
- "The arrest will probably not derail the U.S.-China trade talks."
- "That could change if there are additional U.S. moves against Huawei, especially if they come from the executive branch."
- "Any foreign and especially U.S. tech firm that has supply chain reliance on China needs to be deep into planning for reducing that reliance, no matter how hard, painful and expensive such a shift would be."
- "Frankly, boards of directors of those firms are negligent at this point if they are not pushing for this."
Bottom line: This could be a real test case for whether the U.S. will have teeth in its challenge of Chinese tech aspirations.