When A 'Trade War' Involves Seizing And Imprisoning Foreign Execs, It's No Longer Just About Trade

from the it-kinda-leads-to-actual-wars dept

Fri, Dec 7th 2018 9:48am — Mike Masnick

For years we've been writing about the weird US government infatuation with the Chinese telco equipment firm, Huawei. The company has built a widely successful business, but going back many years there's been a loud whisper campaign that the company's equipment would send information back to the Chinese government. Of course, when our own government investigated this, it could find no evidence at all that this was true. It also seems notable that Huawei itself asked for this investigation, claiming that it would clear the company's name, since it wasn't doing anything that people were accusing it of doing. This doesn't mean that the company isn't doing something nefarious, but such claims should have some sort of evidence to back them up, and so far they've been lacking.

Of course, this may have been one of those situations where people assumed that whatever we would do to others, others must be doing to us, because what we do know, is that the NSA broke into Huawei's computers and grabbed a bunch of emails and source code. That bit seems to get left out of all the fear mongering reporting about Huawei. Oh, and it later came out that much of the whisper campaign about Huawei spying for the Chinese government... originated from the US firm Cisco, which was seeing its market share eroded by Huawei.

So we've long taken the claims about Huawei with a large grain of salt, even as most in the media have been willing to repeat the allegations about Huawei without mentioning the lack of evidence, Cisco's involvement, or the fact that the US government swiped a bunch of stuff from Huawei, even though all of those things seem kinda relevant.

By now, of course, you've probably heard that Canadian officials arrested Huawei's CFO, Meng Wanzhou, who also happens to be the daughter of the founder, and there are plans to try to extradite her to the US. While no charges have been revealed, most people claim it has to do with violating US sanctions on Iran by shipping US made equipment to Iran. The details here will matter, but it's still incredibly unusual to have a friendly country arrest a top exec and then try to extradite them.

Even if the official charges have nothing to do with the ongoing trade war with China, as nearly everyone is pointing out, there's no way this doesn't create massive blowback on any new trade agreement. Remember it was just a few days ago (was it really just a few days?) that President Trump announced that he'd agreed to end the senseless trade war he'd started (which has created a massive import tax on American businesses and consumers). Of course, when the Chinese gave their version of the story, it sounded remarkably different than Trump's version.

But, at least it sounded like progress was being made, and maybe we could end the insanity. But, of course, by having an ally arrest a top exec, it's thrown everything up in the air. Imagine, for example, if Sheryl Sandberg was on a trip to Pakistan, and was arrested by authorities there and extradited to China to face criminal charges. That's kind of the equivalent of what the US has just done via Canada.

Then, take it a step further. White House officials have told the press that they believe Meng "could be used as leverage with China in trade talks," and you realize this has fuck all to do with Iranian sanctions. No, that's the White House more or less admitting that they've taken a hostage in a trade war. That's hellishly dangerous. Because China will not hesitate to retaliate. If I were an American business exec, I'd stay far away from China or any of its allies right about now.

Arresting an executive over such a thing, and then admitting you want to use her as "leverage," just as you're negotiating a complex trade deal is... the kind of thing that turns a trade war into an actual war. It's an incredibly dangerous move that should concern everyone.

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Filed Under: arrests, china, donald trump, extradition, hostage, iran, meng wanzhou, surveillance, trade war, war
Companies: cisco, huawei

44 Comments

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Reader Comments

The First Word

“

If I were an American business exec, I'd stay far away from China or any of its allies right about now.

Yes, this is a good idea just as a general principle.

China has been blatantly abusing us in every way they can think of ever since the Nixon administration, and for all the stupid crap he's done wrong, it's good to see President Trump at least get this one right. I wouldn't have expected him to be the president who finally calls them on their behavior and actively works to get a more equitable system in place, but it would seem that that's the world we're living in today.

—Mason Wheeler

”

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mcinsand, 7 Dec 2018 @ 10:02am

people that throw lots of stones
From what I've seen, people that throw lots of stones generally live in glass houses; they reveal more about what they do than they do the accused. If someone regularly calls others liars, I've learned to not trust what they say. Some people accuse others of taking their things with no basis, and I know to watch my things carefully around them. Republicans have been screaming election fraud, and we are now learning why election fraud is so heavily on their minds. If the US is working so hard to push the theory that China is putting backdoors and spyware into Huawei's phones, then I want my next phone to be made and manufactured as far from the US as possible.
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radix (profile), 7 Dec 2018 @ 10:10am

Rumors originated from Cisco
Let's not forget that Cisco itself was the one targeted by the NSA for installing backdoors into foreign-bound equipment.

Cisco's market position was being eroded precisely because their firewalls were sending information back to a government power, exactly what they are now accusing Huawei of.

In other words, the US government got caught with it's hand in the cookie jar, and is now attempting to right its own mistake by saying everybody else is doing the same thing.
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Glenn, 7 Dec 2018 @ 10:21am

Never let it be said that Trump will let pass a chance to display his immense stupidity.
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Derry Vation, 7 Dec 2018 @ 10:23am

But why sanction Iran?

fuck all to do with Iranian sanctions.

Iran is no particular threat to the US, especially when left alone. It's just more of the US stirring up / destroying the Middle East as Israel wants. "It's No Longer Just About Trade", indeed.
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Derry Vation, 7 Dec 2018 @ 10:24am

Re: But why sanction Iran?
But on the instant case, I doubt there's any cause, and we might agree... Until you started throwing in extra rambling:

Imagine, for example, if Sheryl Sandberg was ... arrested ... and extradited to China to face criminal charges.

You have the opinion that all Facebook (all of Silicon Valley too) executives are Economic Royalty above all national laws. Only test is whether validly charged. If don't want to risk being charged, either obey every country's laws or keep the business entirely out.

NSA broke into Huawei's computers and grabbed a bunch of emails and source code. That bit seems to get left out of all the fear mongering reporting about Huawei.

Glad you put that sentence in there, shows your bias yet more: So, you can conceive of no possibility that what NSA discovered could be cause for action?

Oh, and it later came out that much of the whisper campaign about Huawei spying for the Chinese government... originated from the US firm Cisco, which was seeing its market share eroded by Huawei.

That assertion was started by Google. And it's come out that GOOGLE was/is enmeshed with Huawei. -- And what corporation are YOU enmeshed with by its "support"? -- There are NO coincidences in politics, indeed.

This time pieced up because didn't go in first or second try...
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Anonymous Coward, 7 Dec 2018 @ 10:38am

'The details here will matter, but it's still incredibly unusual to have a friendly country arrest a top exec and then try to extradite them' isn't this what NZ did with Kim Dotcom and the UK did with Assange? if not, please explain the differences as both people were wanted by the USA even though they had done nothing, from what i recall reading, in the USA. it was the fact that the USA was pissed at them and wanted to do whatever they could to satisfy members of other US industries!
and anyone who thinks that USA made modems/routers/networking equipment dont do the same things Huawei is accused of (but i seem to remember were found a while ago to NOT be doing what they are accused of), wake up!!
further, 'is... the kind of thing that turns a trade war into an actual war'. isn't this exactly what the USA has been trying to do since Obama was replaced?
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Anonymous Coward, 7 Dec 2018 @ 10:41am

This story is so weird ... looks like a cover up - not sure what that might entail other than spying on the entire internet.
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Thad (profile), 7 Dec 2018 @ 10:41am

If I were an American business exec, I'd stay far away from China or any of its allies right about now.

Damn right. This is nuts.

On the plus side, it sounds like something that'll make for a good plot on Silicon Valley. Granted, they already did the "American exec taken hostage in China" story, but it's not like the show minds repeating itself.
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Call me Al, 7 Dec 2018 @ 10:47am

Re:
I won't disagree on Dotcom.

Assange is different. He was wanted in Sweden for rape charges and I don't think that should be ignored, even if it all was rather odd. The worry was they would then pass him on to the US but that is a separate issue.
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Pixelation, 7 Dec 2018 @ 10:49am

Maybe
Maybe this has something to do with it as well...

https://www.nytimes.com/2018/11/25/us/politics/china-exit-ban.html
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Anonymous Coward, 7 Dec 2018 @ 10:52am

Re: people that throw lots of stones

From what I've seen, people that throw lots of stones generally live in glass houses; they reveal more about what they do than they do the accused.

I would, at this point, be more surprised to find out that Donald Trump didn't have a forged birth certificate.
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Anonymous Coward, 7 Dec 2018 @ 10:56am

Re: Re: people that throw lots of stones
G-20.in
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Anonymous Coward, 7 Dec 2018 @ 10:56am

Re:
Dotcom and Assange do not have obvious patrons in other countries. In Dotcom's case, he was largely resident in a US-friendly country, so he was constantly at risk as soon as the US decided to hold a grudge. Assange's actions angered powerful people in the US, so they targeted him personally. In the case of Meng Wanzhou: her professional relation to a major Chinese telecom and her personal relation to its founder both suggest that she will have at least one powerful patron in China advocating for her. Unlike Dotcom, she does not routinely reside in a location where US-friendly authorities could easily and lawfully reach her. Unlike both Dotcom and Assange, from the facts so far, it looks like she was targeted for her personal and/or professional relationships, not for any actions she took or directed others to take. Charging documents may contradict this point, when they are finally released. Whether anyone will take those documents seriously remains to be seen. Under the circumstances, there will be strong suspicions that such charges are just legal theater for an arrest that was actually about her connections.
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DannyB (profile), 7 Dec 2018 @ 11:16am

Re:
He needs people to adore him. So he never misses an opportunity.
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JoeCool (profile), 7 Dec 2018 @ 11:21am

Re: people that throw lots of stones
I like the version that goes, "beware one who sees evil
everywhere they look – chances are they are looking in a mirror."
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Baron von Robber, 7 Dec 2018 @ 11:22am

Re: Re: people that throw lots of stones
His birth certificate was an apology letter to his father from the condom company.
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Baron von Robber, 7 Dec 2018 @ 11:23am

Re: Re:
He won't knowingly hire anybody smarter than him. Qualified help is very very hard find.
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JoeCool (profile), 7 Dec 2018 @ 11:23am

Re: Re:
People love Trump because he makes THEM look smart in comparison. :)
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JoeCool (profile), 7 Dec 2018 @ 11:28am

Re: Re:
Any bets the charges won't be even more trumped up (pun totally intended) than Dotcom's? Anybody?
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Gary (profile), 7 Dec 2018 @ 11:31am

Re: Re: But why sanction Trolls?
Your post - flagged. Thanks for contributing to the TD Corporation. Have a nice day in your alternate fact world.
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James Burkhardt (profile), 7 Dec 2018 @ 11:35am

Re: But why sanction Iran?
Its an interesting discussion to have, though a bit tangential. I know we feared nuclear weapon development in the region, and Iran has a terrible human rights record in recent years. Those seem to be the main legitimate drivers of sanctions. I supported the Obama effort to ease sanctions though, but I am ill educated on the topic of current behavior to judge the validity of current sanction levels.

Of course we now know why republican's fought so hard to keep those sanctions when Obama was renegotiating them - so they could be used as a pretext to kidnap foreign persons as hostages in trade negotiations.
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Mason Wheeler (profile), 7 Dec 2018 @ 11:41am

If I were an American business exec, I'd stay far away from China or any of its allies right about now.

Yes, this is a good idea just as a general principle.

China has been blatantly abusing us in every way they can think of ever since the Nixon administration, and for all the stupid crap he's done wrong, it's good to see President Trump at least get this one right. I wouldn't have expected him to be the president who finally calls them on their behavior and actively works to get a more equitable system in place, but it would seem that that's the world we're living in today.
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Anonymous Coward, 7 Dec 2018 @ 12:06pm

Re:
Critizing these stuff while turning a blind eye to what China did is nonsense.
As a citizen in Hong Kong, I do not see any reason for not supporting - when the enemy is coming for you, you don't simply sit there and yell for peace. You need to stand up and fight.
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Thad (profile), 7 Dec 2018 @ 12:23pm

Re: Re:

Critizing these stuff while turning a blind eye to what China did is nonsense.

No, implying that kidnapping a Chinese citizen on spurious legal grounds and holding her hostage in a trade negotiation is okay because China commits human rights violations too is Whataboutism.
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ShadowNinja (profile), 7 Dec 2018 @ 12:37pm

Are the charges even legitimate, or just trumped up lies?

Then, take it a step further. White House officials have told the press that they believe Meng "could be used as leverage with China in trade talks," and you realize this has fuck all to do with Iranian sanctions.

It's even worse then that. A statement like that from officials working for the head of the US government makes it look like the charges are likely baseless, and were just made up for pure political reasons, not actual law breaking.

As in the kind of thing a dictatorship does. The kind of thing we've accused China's government of doing in their 'corruption crackdowns', where enemies of China's presidents are prosecuted, but his allies get away with all sorts of corruption. Because it's not really about fighting corruption, it's about hurting enemies of the president of China.

Also, I'm not lawyer, but I think it sounds like complete BS that shouldn't be enforceable under sensible laws to say that a foreign business has to follow trade sanctions that were implemented by a second foreign government that they do business in.

If the US doesn't like it that they violate US trade sanctions because they aren't sanctioned by China then they can bar the foreign company from selling their products in the US until they abide by said sanctions.
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ECA (profile), 7 Dec 2018 @ 1:30pm

HOw to piss off the world, for all Americans..
And force us to stay at home..
I feel like canned ham.
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Anonymous Coward, 7 Dec 2018 @ 2:25pm

Re: Re: Not the way you think
It’s vaguely getting through even your notoriously thick skull that donny’s going down eh?
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MAGA, 8 Dec 2018 @ 12:41am

This site is anti-American
Another article that shows how anti-American this site really is. Rather than stick with facts, like the hundreds of billions in trade imbalance with China, it calls Trumps plan a senseless trade war. This is why dumb blog writers should stick to blogs and not talk about economics.
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ECA (profile), 8 Dec 2018 @ 3:14am

Re: This site is anti-American
Can I describe senseless??

What do we have that THEY WANT?? NOTHING.
We send wood over there, that They pay Over charged prices for...then turn it to sawdust, and make goods that they send back..Over priced goods...that Corps sell to us...Barely affordable.
WE even get sheet rock from them...for no reason except that Gypsum is CHEAP.. And USE makers Over charge for it..

For Some God awful reason, Corps got this funny idea that FORCING our economy up, up up, up... When it does not need to GO UP..
When Local farmers get paid about $0.03 per pound for Grains/fruits/ veggies...and you pay $2 for 1/4 pound at McD'...its F'ing stupid.
when the CEO and top execs get raises and bonus every year worth MORE then 100 Low paid workers... THATS STUPID..

A person said to me..
"I pay more taxes then 10 poor people"..
I looked at him and said..
"THATS NOT HOW IT WORKS."
He looked at me...
I said..
"Its how much you SPEND.. and on What do you spend it on".
Those 10 people buy more food, pay more bill, Pay more insurance, medical, CABLE, and also FEED 4 people in EACH OF THEIR FAMILIES.. They will buy more cars, and more Fuel and more every ting then you will will all your money in the NEXT YEAR.."
"Go pay for 1 house in another state or country..That will not help all the companies that those 10 have given money to, TO PAY THEIR EMPLOYEES.."
"And those employees, will then do the SAME.."
who makes this economy and country work...NOT YOU.
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JoeCool (profile), 8 Dec 2018 @ 4:41am

Re: Re: This site is anti-American

A person said to me.. "I pay more taxes then 10 poor people"

Maybe... and maybe he pays a tax attorney more than 10 poor people to get him out of his fair share. And even when he does pay more taxes than 10 poor people, he receives more income than 10000 poor people.
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Anonymous Coward, 8 Dec 2018 @ 6:00am

Re: This site is anti-American
Not to mention the obvious fact that it stated that Trump started the trade war. The truth is that Chinese manipulation of their currency, local ownership regulations, and IP theft was the start and Trump only chose to respond to their trade war.
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Anonymous Coward, 8 Dec 2018 @ 10:28am

Re: Re: This site is anti-American
I agree somewhat - I think its our greedy execs sending business to china that (even if they have to give up IP) because its all about short term gains that line their pockets (to hell with the future).
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Anonymous Coward, 8 Dec 2018 @ 10:30am

Hmm - this beta site seems to act strange when posting. The page started jumping around and I had to scroll back to the message window. Not happening in this post, but it did happen when replying in the middle of the thread.
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Anonymous Coward, 8 Dec 2018 @ 10:58pm

Re: But why sanction Iran?
We sanction Iran because that's what your boi Donny Trump said so, remember blue?
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Anonymous Coward, 9 Dec 2018 @ 12:08am

Re: This site is anti-American
Looks like a triggered snowflake MAGAd in his panties.
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Anonymous Coward, 9 Dec 2018 @ 6:55am

Re:
Apparently they now just kill the person(s) they do not like.
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Anonymous Coward, 9 Dec 2018 @ 6:59am

Re:
"China has been blatantly abusing us"

and doing things "we" would never do ....

Trump has screwed up the trade situation immensely, not just with China. Bull in a China shop comes to mind. So please do not even attempt to blow that smoke up my ass.
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Anonymous Coward, 9 Dec 2018 @ 7:02am

Re: Re: Re: This site is anti-American
"I pay more taxes then 10 poor people"

Yup - many who think this way overlook how their income was achieved.
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Anonymous Coward, 9 Dec 2018 @ 7:04am

Re: Re: This site is anti-American
"The truth is that Chinese manipulation of their currency"

Why do you not think it started a long time before that?
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Anonymous Coward, 9 Dec 2018 @ 12:33pm

Re:
That was the libtarts jumping up and down.
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Anonymous Coward, 10 Dec 2018 @ 4:19am

"Turning a trade war into a real war"

Get some perspective dude.

Having Navel Warships sail in disputed waters can turn into a real war. Having Aircraft fly in disputed airspace can turn into a real war.

Trade war? That is way down the list of what has been going on for quite a while.
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Wendy Cockcroft, 10 Dec 2018 @ 5:37am

Re:
Holding a business executive of a major company hostage is not way down the list, it's near the top. Unless this woman has committed a crime she ought to be released with an apology at once.

If you really want to hit China where it hurts with regard to trade, try banning Americans from exporting American jobs overseas. Problem solved.
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Thad (profile), 10 Dec 2018 @ 8:35am

Re:
An argument is a connected series of statements intended to establish a proposition. It isn't just contradiction.
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Thad (profile), 10 Dec 2018 @ 8:36am

Re: Re: Re:
No, here's a chilling thought for you: there are people who are so dumb they think Trump is smart.
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