Trade spat could turn into cold war
Canadian officials in Vancouver arrested Huawei CFO Wanzhou Meng at the request of US authorities on Dec 1 for violations of sanctions against Iran.
There are a few things to note:
It's extremely rare for a country to arrest and extradite someone for something like this. Extradition is generally reserved for drug dealers and terrorists. Canada extradites about 100 people a year on the request of foreign countries so this is extremely unusual.
The timing is notable -- December 1 -- it was the day Trump met Xi and the day Canada and the US signed the new NAFTA deal.
Wanzhou Meng is the daughter of the founder of Huawei and he is worth about $3.3 billion and is a major influencer in China
Add it up and this is a major escalation in whatever is going on with the China and US.
The big question we've been asking is: Does the US just want better IT and trade terms with China? Or does the US want to contain China more broadly in a new cold war?
This arrest puts another tick in the box of the cold war scenario. It's something I talked about with BNNBloomberg last month.
