Canadian authorities arrested the Chief Financial Officer of Huawei Technologies, Meng Wanzhou, for possible extradition to the USA on Wednesday. She had been detained on Saturday in Vancouver, British Columbia, according to the Justice Department spokesman, Ian McLeod. China has demanded her to be released on an immediate basis and warned that this could lead to retaliatory measures against Canadian and American executives in China.

The arrest also happened on the same day as President Trump met with the Chinese President Xi Jinping, where they discussed the trade war after the closure of the G20 summit in Argentina. A 90-day truce was agreed upon due to the fact that the escalating trade war is becoming a threat to economic growth and stability worldwide.

Meng is quite a prominent member of Chinese society. Not only is she the daughter of the company’s founder, Ren Zhengfei, but she is also the deputy chairman on the company’s board. Further details regarding the case could not be obtained as there is a ban on it. This banning order was sought by Meng, who has a bail hearing on Friday.

What we know thus far?

According to the Wall Street Journal, US authorities are investigating possible violations of sanctions against Iran by Huawei Technologies. Huawei Technologies, on the other hand, has issued a statement claiming that Meng was changing flights in Canada where she was detained to face ‘unspecified charges on behalf of America’ in New York. They claimed that the company has not been provided with much information about the charges and are not aware of any wrongdoings on the part of Ms. Meng.

Huawei Technologies claims that it complies with all rules and laws, including the sanctions imposed by the US, United Nations, and the European Union as well as all possible export controls. The Chinese Embassy in Ottawa has opposed and protested these actions as they say that this is a violation of the human rights of the victim and they demand for her to be released. There has been no comment by the US Justice Department.

Earlier this year in April, China had appealed to US officials to avoid damaging business confidence in Huawei when the Wall Street Journal claimed that US authorities were investigating Huawei Technologies for violating the sanctions against Iran. They said it could deeply undermine investor confidence in the US business environment and harm the domestic economy, according to Hua Chunying, who is the Foreign Ministry spokeswoman.

Looking at the Future?

According to David Mulroney, who is a former Canadian Ambassador to China, the US and Canada should be ready for a ‘sustained fury’ as China will play tough over the Iran allegations, which are quite damaging for Huawei Technologies, and China would surely retaliate hard. A crisis can be foreseen in the relations between these three countries if she is extradited and the talks of the free trade agreement are over.

The US Sen. Ben Sasse, who is a Republican member of the Senate Banking and Armed Services committees, applauded Canada for the arrest and claimed that Huawei is an agent of China’s communist party and that the US is grateful for the arrest for this company for breaking US sanctions against Iran.