Arrest of Huawei’s Sabrina Meng Wanzhou signals trouble for US tech companies doing business with China
- US federal prosecutors will ‘want to know whether [suppliers] knew or had reason to know these violations occurred’, an analyst said
- Fears grow that tensions between the US and China will make a trade deal more difficult to achieve
Meng, the daughter of founder Ren Zhengfei of Huawei, the second largest smartphone maker in the world after Samsung, was arrested on Saturday by police in Vancouver, Canada, at the request of the US government on suspicion of violating US sanctions against Iran.
The arrest of Meng, who is also known as Cathy Meng, is the latest move by the Trump administration to crack down on large Chinese technology companies after a ban on another Chinese telecommunications equipment maker, ZTE, earlier this year.
It also sends a strong message that US tech companies that have business with China might face more headwinds.
“You can see a gradual progression from the ZTE sanctions case … which shows that [Washington is] taking violations of US sanctions incredibly seriously,” said Alma Angotti, the managing director of Navigant Consulting and an anti-money laundering expert.
Earlier this year, the US banned ZTE from buying any American components for seven years after it violated US sanctions by selling products to Iran and North Korea. Washington cited national security concerns.