The Chief Financial Officer of Huawei, Meng Wanzhou, has been arrested in Canada under an extradition request from the United States.
Meng was changing planes in Canada when she was detained. Huawei has released a statement saying she is facing extradition to the Eastern District of New York.
Details about the arrest and the potential charges that Meng faces is unclear due to a publication ban being put on the incident by Canadian courts which stops news outlets speaking specifically about charges or the evidence around those charges.
However, it is likely the arrest relates to the U.S' suspicious that Huawei potentially broke trade sanctions in place against Iran.
Chinese-U.S relations already strained
If the charge proves true, the consequences for Meng and the company could be severe. Either way, this is a huge escalation in the current turmoil between China and the US.
The timing is particularly interesting given that Trump and Chinese leader Xi Jinping just agreed to commit to 90 days of trade negotiations to clear up the ongoing trade war between the two countries.
The arrest occurred on December 1, the same day that President Trump and Xi were having a ‘sideline’ meeting at the G20 in Argentina. The arrest was initially kept private at Meng’s request.
China demands the release of CFO
Huawei released a statement on Thursday morning stating that the CFO was being temporarily held by Canadian authorities under direction from the U.S.
“The company has been provided very little information regarding the charges and is not aware of any wrongdoing by Ms. Meng,” Huawei said.
“The company believes the Canadian and U.S. legal systems will ultimately reach a just conclusion. Huawei complies with all applicable laws and regulations where it operates, including applicable export control and sanction laws and regulations of the UN, U.S. and EU.”
Shares in the chip sector fell after news of the arrest became public. China has demanded the release of Meng claiming her detention might be a violation of human rights.
"The detention without giving any reason violates a person's human rights,” a Chinese spokesperson told reporters.
"We have made solemn representations to Canada and the US, demanding that both parties immediately clarify the reasons for the detention, and immediately release the detainee to protect the person's legal rights."
The arrest sends clear signals that the road to smooth the relationship between China and U.S is far from smooth.
Huawei was founded in 1987 and has grown to become the world’s largest provider of telecom equipment, and the world’s No. 2 seller of smartphones beating out Apple to sit behind Samsung.
Interesting Engineering will update this story as it continues to unfold.