The US has charged Huawei and Meng with bank fraud, wire fraud, violating sanctions and IP theft.
The activity is described as being countenanced at the highest levels. The US is seeking Meng’s extradition and describes Huawei’s growth strategy as being built on “lies and deceit.”
Speaking of “lies and deceit”, here’s an expert, in Matt Whitaker, to explain:
Nobody ever accused the Trump administration of caring much for optics, but when it comes to the Huawei case, the White House has demonstrated a remarkable penchant for flouting decorum during critical moments in the ongoing trade negotiations.
Recall that the arrest of Huawei CFO Wanzhou Meng (in Canada at the behest of the US) reportedly unfolded literally at the same time that Trump and his posse were sitting down to dinner with Xi in Argentina on December 1.
When news of the arrest hit on December 5, it played havoc with S&P futures on the reopen after a national day of mourning for President Bush.
Meng’s arrest kicked off what has since become a serious diplomatic row between Canada and China, with the latter arresting two Canadians and sentencing a third to death. The ongoing feud has manifested itself in some truly bizarre ways, some of which we documented in “Kovrig, Meng, Spavor, Rodman And The Twilight Zone We Now Call Reality.”
On Friday, Justin Trudeau ousted John McCallum, ambassador to China, after McCallum made a series of ill-advised comments to Chinese media regarding Meng’s “solid case” for fighting a US extradition request. Here, for those who missed it, is what he said:
I think she has quite good arguments on her side. One, political involvement by comments from Donald Trump in her case. Two, there’s an extraterritorial aspect to her case. And three, there’s the issue of Iran sanctions, which are involved in her case, and Canada does not sign on to these Iran sanctions. So, I think she has some strong arguments that she can make before a judge.
Fast forward to Monday and the US is all set to announce criminal charges related to Huawei during a scheduled enforcement action presser featuring Acting Attorney General Matthew Whitaker (if he’s not busy tipping Trump off on the Mueller probe), Kirstjen Nielsen (if she still has a job), Wilbur Ross (if he’s awake), and FBI Director Christopher Wray.
This could be related to the whole “Tappy” thing (i.e., to T-Mobile) or it could be something broader given that Huawei is obviously at the center of US national security concerns tied to Chinese tech. The Wall Street Journal reported that a criminal probe was ongoing earlier this month.
Whatever it’s related to (and this is the point), the timing is horrible, coming as it does just two days ahead of talks between Chinese Vice Premier Liu He, who will be in Washington on Wednesday and Thursday for talks with Lighthizer and Steve Mnuchin.
So far, US officials and their counterparts in Beijing have been keen to insist that the Huawei drama can be separated from the trade talks, but Trump seems intent on putting that to the test. One has to think that today’s enforcement action might embarrass Liu He, if Xi wasn’t given a heads up.