The arrest of Huawei CFO Meng Wanzhou in Canada on Wednesday brought the Chinese telecom giant’s business practices under global scrutiny and raised questions about the state of tenuous trade negotiations between the U.S. and China.
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Meng, 46, faces extradition to the U.S. after her arrest on suspicion of violating existing sanctions against Iran. Aside from her role as a top Huawei executive, she is the daughter of the company’s founder, Ren Zhengfei.
Huawei is among China’s most influential firms, with revenue of roughly $92 billion in 2017 alone, according to Reuters. The company ranks as the world’s top supplier of telecommunications network equipment and the second-most prolific maker of smartphones, ranking ahead of California-based Apple and trailing only South Korea-based Samsung.
Huawei’s rise to dominance has generated controversy. The firm became prominent in the 1990s amid allegations of copying rival technology and undercutting prices. The U.S. government has largely banned the use of Huawei equipment by its agencies, and intelligence officials have warned that Beijing may have the ability to tap into the firm’s equipment to spy on users.
Under former President Barack Obama, the U.S. government pressured allies to limit their use of Huawei technology due to security concerns. The Trump administration has argued that Huawei has benefited from market manipulation and other unfair practices. Australia and New Zealand recently banned Huawei from building 5G networks in their countries.
The dispute over Meng’s arrest comes just days after the U.S. and China agreed to a temporary truce on their escalating trade conflict. The U.S. has slapped tariffs on billions of dollars in Chinese goods in what the Trump administration says is an effort to crack down on intellectual property theft and unfair trade practices. Beijing has responded with retaliatory measures.
Meng’s arrested caused global markets to tumble and prompted a stern response from China, which has demanded her immediate release. The exact circumstances of her arrest were unclear.
The Wall Street Journal reported earlier this year that U.S. officials were investigating Huawei’s ties to Iran.