U.S. Has No Intention Of Ending Trade War With Arrest Of Huawei Executive

Trade war victim
Arrested in Canada. Huawei CFO Meng Wanzhou (Photo: Reuters)

The timing of the arrest of the daughter of the founder of Huawei Technologies Co, Ltd is leading to mounting speculation the president Donald Trump has no interest in reaching a deal to end its trade war with China.

Instead, some analysts are speculating this move is yet another part of the Trump administration's aim to contain China by strangling its Made in China 2025 initiative. Analysts noted the Trump administration's higher tariffs on Chinese goods imposed in June focuses mainly on technologies part of Made in China 2025, including information technology and robotics technologies.

It is also odd that Meng Wenzhou, daughter of Huawei founder Ren Zhengfei, was arrested in Vancouver, Canada on Dec. 1, the same day president Donald Trump and president Xi Jinping sat down for a 2-1/2 hour-long dinner to try to find an amicable solution to ending Trump's trade war on China.

What bothers observers is that Meng was arrested in Canada upon the request of the United States for alleged crimes she committed in the U.S. Huawei later issued a statement saying Meng did nothing wrong and are at a loss as to why she was arrested.

The arrest of a very high-profile Chinese executive would have had to be known to Trump. If this were true, Trump went into the meeting with Xi knowing Meng would be arrested.

To counter the notion of Trump deceiving Xi, National Security Adviser John Bolton absolved Trump of any deception, claiming Trump had no knowledge of Meng's impending arrest.

The arrest of Meng will corrode trade negotiations to stop the trade war between Washington and Beijing, said American political risk consultancy firm, Eurasia Group. Eurasia pointed out Beijing "is likely to react angrily to this latest arrest of a Chinese citizen in a third country for violating U.S. law."

In a note to its investors, Deutsche Bank said Meng's arrest is a clear signal the trade war "is escalating to a new level." Chief China economist Zhiwei Zhang said public opinion in China will likely become more negative in respect to the trade war, and potentially against U.S. companies. He said Beijing might find it difficult to tell the public they have offered significant concessions to the U.S.

Global Times, a newspaper owned by the Communist Party of China (CPC) responded to Meng's arrest by tweeting about Trump's escalation of the trade war.

It quoted an expert close to the the Ministry of Commerce of China as saying China should be fully prepared for an escalation of the trade war with the U.S., "as the U.S. will not ease its stance on China, and the recent arrest of the senior executive of #Huawei is a vivid example."

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