The United States appears determined to stifle China’s telecom equipment maker Huawei as it asked Canada to arrest the company’s chief financial officer (CFO) for violating U.S. sanctions against Iran.
Industry analysts are wondering whether Washington’s latest move would have repercussions for Korea, especially LG U+, a Korean mobile service provider which has decided to use Huawei equipment for its 5G network.
According to media reports, Canada’s Department of Justice said on Dec. 5 (local time) that the country arrested Meng Wanzhou in Vancouver, where she is facing extradition to the U.S. The arrest was reportedly related to violations of U.S. sanctions against Iran.
Meng, the daughter of Huawei founder Ren Zhengfei, was arrested on Dec. 1 at the request of U.S. authorities and a court hearing has been set for Dec. 7 (local time), a Canadian Justice Department spokesman said.
The arrest of Meng is expected to affect trade negotiations between Washington and Beijing. “The arrest means gloves are fully off,” said the Eurasia Group, a risk consultancy.
Reuters quoted analysts as saying that the Huawei executive’s arrest would not derail the start of trade negotiations following the summit between U.S. President Donald Trump and Chinese President Xi Jinping last weekend in Argentina. Still, the incident is likely to cloud the talks.
Washington’s latest move also suggests it is determined to crack down on the Chinese telecom equipment giant. According to Reuters, U.S. authorities have been probing Huawei since at least 2016 for allegedly shipping U.S.-origin products to Iran and other countries in violation of U.S. export and sanctions laws.
Washington has recently asked its allies to stop using Huawei equipment for security reasons. A growing number of countries, including Australia and New Zealand and Britain have joined the U.S. in banning Huawei equipment.
Yet LG U+ has decided to use Huawei equipment in building its network for 5G services. The company says it needs to use Huawei equipment for 5G services because it used equipment from the Chinese vendor in building the network for 4G services. In the initial phase of 5G services, a mobile service provider needs to ensure compatibility with its 4G services.
But it remains to be seen whether the mobile operator would be able to go ahead with its plan as pressure from the United States is growing.