When a Chinese tech executive was arrested in Vancouver on U.S. charges Dec. 1, Canada immediately found itself in the middle of a standoff between the United States and China.
It was not until Monday that we got a sense of the full scope of the conflict — and what it could mean for Canada.
At a news conference in Washington on Monday, U.S. officials announced a 13-count indictment against Huawei, two affiliates and chief financial officer Meng Wanzhou, detailing allegations of bank fraud, obstruction of justice and theft.
At a December bail hearing for Meng, we learned the United States was seeking her extradition on charges that she misled a bank about her company’s relationship with a subsidiary, leading to violations of U.S. sanctions on Iran.
On Monday, it became clear the United States thinks she was just one part of a decade-long conspiracy by Huawei to allegedly evade sanctions and deceive U.S. law enforcement.
U.S. officials also announced a second case against Huawei, accusing the company of stealing information about a phone-testing robot developed by T-Mobile, by, among other things, sneaking into a locked lab and stealing a robot arm. The company is also accused of offering financial incentives for employees to steal secrets.
The eye-popping allegations — which you can read in full here — have not been proved in court. Huawei on Tuesday denied the charges. The Chinese government casts the moves as a U.S.-led effort to constrain China’s rise.
Whatever the outcomes of the cases, the allegations presented Monday look sure to shape U.S.-China relations, adding a layer of uncertainty to trade talks this week and setting a more combative tone for months, if not years, to come.
And that, no doubt, will shape what happens in Canada.
In the short term, that the U.S. Department of Justice seems determined to proceed with Meng’s extradition means her case will continue to play out in Canadian court.
Meng appeared in a Vancouver courtroom Tuesday to request a minor change to her bail conditions. She is now due back in court March 6 for an extradition hearing. Experts think her case could take years to work its way through the legal system, particularly given the likelihood of appeal.
That leaves Canada with serious, medium-term problems. Shortly after Meng’s arrest, China detained two Canadians, Michael Kovrig and Michael Spavor, a move widely seen as retaliation for Meng’s arrest. Not long after, a Canadian sentenced to 15 years in a Chinese prison for drug smuggling was retried and sentenced to death.
With the fate of three Canadians on the line, Prime Minister Justin Trudeau has sought verbal support from a wide range of allies. Both Canada and the United States have updated their travel advisories for China, noting the risk of arbitrarily applied law.
But foreign condemnation — which Beijing has dismissed as “microphone diplomacy” — seems unlikely to move Beijing to release Canadians, or improve their treatment, certainly not without some sort of move on Meng.
Some, including the recently ousted Canadian ambassador to China, wondered aloud if whether the U.S. could or would end the standoff by dropping the case.
Shortly after Meng’s arrest, President Trump mused on Twitter he would cut a deal if it meant securing trade concessions from China. With Meng free, the imprisoned Canadians would, theoretically, have a better chance of release.
But Monday’s news conference makes both a last-minute intervention by Trump and a Meng-for-the-Canadians deal look even less likely, narrowing Trudeau’s options.
Lastly, U.S. moves against Huawei raise tough, long-term questions about Canada’s relationship with China. Trudeau campaigned on a promise to improve relations with the world’s second-largest economy, as part of a broader push to make Canada less dependent on trade with the United States.
Nearly two months into the Meng dispute, with two Canadians in detention and one Canadian facing the death penalty, the mood in Canada seems to be shifting. With China in the headlines for the wrong reasons, Trudeau may find Canadians are less willing to engage the country, let alone do business with Huawei.
Four of the five countries in the “Five Eyes” intelligence-sharing network — the United States, Britain, Australia and New Zealand — have blocked Huawei from their new 5G cellular network, citing national security concerns. Trudeau’s government has yet to make a decision.
With detailed, if unproved, allegations now circulating, it will be interesting to see what it decides.