By Maryam Khormaie

Sanctions on Iran or trade warfare? What is the pretext for punishing Huawei in America?

December 14, 2018

TEHRAN - Canada has arrested a senior Huawei technology company official suspected of violating sanctions against Iran at the request of U.S. officials.

Meng Wanzhou, who is one of the vice-chairs on the Chinese technology company’s board and is the daughter of the company’s founder, Ren Zhengfei, was arrested at the request of U.S. officials in Vancouver.

A spokesman for the Canadian Ministry of Justice said in a statement to the Globe and Mail website: “Wangzhou is wanted for extradition to the United States.”

A Chinese foreign ministry spokesman said on Thursday that Beijing had separately called on the U.S. and Canada to “clarify the reasons for the detention” and “immediately release the detained person”. A spokesman for the Chinese embassy in Canada, in a statement, said: “Canada has arrested a citizen of China who has not violated any of the laws of the United States or Canada at the request of the United States.”

In a short statement, China's Foreign Ministry said that Vice Foreign Minister Le Yucheng had issued the warning to release Meng to Canada's ambassador in Beijing, summoning him to lodge a “strong protest”.

But is his arrest linked to U.S. sanctions against Iran? To answer this question, take a look at the history of Huawei's work.

Huawei, in the 1980s, started its business in China as a telecommunications technology company, but from the outset it focused on developing indigenous technology rather than importing it from the West.

Huawei targeted the global markets as a company with its own native technology during the 1990s. In 2001, it developed its first presence in the United States, then in 2008 in Canada. According to a Bloomberg report in 2011, 45 of the 50 largest  telecom companies in the world used some Huawei equipment.

Accordingly, Huawei's Chinese company has become a highly competitive rival to Western and American companies, which over the past few years has been able to develop a solid footprint in the United States and Canada.

Reasons of punishing Huawei, Iran sanctions or trade warfare?

At the British Columbia Provincial Tribunal during its first detention hearing on Tuesday, Huawei's chief executive announced that Meng Wangzhou, with the establishment of Sky Comex, has been pursuing Huawei subsidiaries throughout 2009-2014 to circumvent U.S. sanctions against Iran.

In fact, the company, via a branch registered in Dubai in the UAE, is accused of violating Iran's sanctions law. As a result, Washington's crackdown is due to the alleged violation of sanctions against Iran. This charge could have been brought under normal circumstances with restrictions on its activities on the U.S. soil or by its outright dismissal, but the arrest of its director and the release of some news stories that long-term imprisonment was probable shows that the issue of Chinese Huawei is much more than a violation of sanctions against Iran.

On the other hand, by looking at the extreme nationalist approaches of the Trump government in commercial markets, it is clear that the White House, with “American First” slogan, is seeking to impede the activities of non-U.S. companies.

So, in the current context, the violation of sanctions against Iran is an excuse for the U.S. Treasury Department to remove one of the most powerful rivals to American companies.

Pressure on Huawei occurred when recently Beijing and Washington agreed on a 90-day cease-fire during their trade war. In the course of these 90 days, the parties will not impose any increase in tariffs on each other's export markets. However, although there is currently no news of the imposition of new tariffs on Chinese goods in the United States, the arrest of a director of a Chinese company suggests that Washington is still interested in maintaining tension with Beijing.

Indeed, if we are to unmask the detention with the issue of the boycott of Iran, we should just mention the pressure that the United States has promoted over the last few months on its allies, including in Europe and even East Asia, which called for cooperation to refuse business with Huawei. The pressure, which seems to have been marginally effective, has so far prevented Japanese and British officials from following the practice of the Chinese company in their countries.

As a result, the arrest of a director of a Chinese company at the behest of the U.S. is bigger than merely a ploy to ensure the sanctions remain in place. It is also a way to try to augment Washington's trade war with China.

Leave a Comment

4 + 13 =