Global Geopolitical Series: Huawei CFO arrest triggers renewed trade war fear

Global stock markets suffered another round of selloffs on Thursday, as an arrest of Chief Financial Officer (CFO) of Chinese telecom giant Huawei in Canada triggered concerns over the recent trade truce. The United States has been pressing its western allies to shun equipment made by the Chinese company. So far, both Australia, and New Zealand, which are part of United States led five-eye intelligence group have blocked some of the key domestic companies from buying products from Huawei, which is one of the largest telecommunications equipment and services providers in the world, and recently surpassed Apple to become the second-biggest smartphone maker after Samsung.

After last week’s G20, financial markets were upbeat on hope that there was increased possibility of a trade deal after a temporary truce was announced with both China and the United States agreeing to refrain from further tariffs on imports from each other until April 2019 to give negotiations a chance to resolve the disputes, and imbalances but that hope seems to have evaporated as Canadian authority arrested the chief financial officer Meng Wanzhou, who is also the daughter of Huawei’s founder on suspicion of violating the U.S. sanctions on purpose against Iran. The United States has asked Canadian authority to extradite Ms. Meng to undergo trial in the United States.

A spokesperson of Huawei said that the company has little knowledge of the charges brought against Ms. Mei, while the Chinese embassy in Canada protested her arrest and called for her swift release.   

The incident is unlikely to help the trade negotiations between the United States and China, as the western alliance continues to crack down on Chinese companies.

Global stocks suffered massive selloffs on the news,

• Hong Kong’s Hang Seng index is down 2.4 percent today.
• India’s nifty down 0.9 percent.
• Japanese Nikkei is down 1.9 percent.
• S&P500 future is down 1.3 percent.