So much for a deal, or a quick end to the Huawei case. The battery of new U.S. charges made it clear the United States is going full steam ahead with a bigger case against the company. China’s beef with Canada over the extradition of Huawei executive Meng Wanzhou will go full steam ahead, too.
Now we know that the U.S. allegations against Ms. Meng are part of a bigger prosecution of Huawei, one that is a big deal to the U.S. government.
How big a deal? Just look at the list of senior figures at the press conference: the acting attorney-general of the United States, the Secretaries of Homeland Security and Commerce, the FBI director, and two U.S. attorneys who had just unsealed indictments against Huawei, one from the Eastern District of New York and another from the Western District of Washington State. That’s not the lineup for every indictment. U.S. authorities definitely want to bring Ms. Meng before an American court.
That means the fight over Ms. Meng is likely to be long, and Beijing's pressure on Canada, if past is prologue, will get nastier.
The nature of the case announced Monday in Washington suggests that the long arm of U.S. justice is reaching out at Huawei in several ways.
In fact, it was two cases packaged together. The first is the one involving Ms. Meng, and it is about fraud and misleading banks into thinking that Huawei had sold a subsidiary, Skycom, which was allegedly violating U.S. and European Union sanctions against Iran. The second is about an alleged intellectual-property theft, notably a cloak-and-dagger-ish effort to steal the technological secrets behind the proprietary robot named Tappy that U.S. telecoms firm T-Mobile used to test its phones.
What do those two cases, filed by prosecutors on different coasts for vastly different federal offences, have to do with each other? Viewed together, they suggest that the company is a broad target for U.S. law enforcement and they represent a general allegation that Huawei is a bad actor.
For good measure, FBI Director Chris Wray tossed in a warning that Americans should worry about the influence the Chinese government has over Huawei and the company’s capacity to “burrow into the American telecommunications market” – even though that had nothing to do with either case. It was a thinly veiled warning against allowing Huawei into next-generation, 5G telephone networks.
China was already hopping mad at Canada for arresting Ms. Meng when it was about bank fraud to evade sanctions. Beijing saw that as an insult to a Chinese corporate champion and one of its untouchable elite – Ms. Meng is the daughter of Huawei founder Ren Zhengfei.
Chinese leaders are probably going to be angrier at Canada now that it’s clear that U.S. prosecutors are taking broad aim at Huawei for allegedly breaking laws, cheating business associates and engaging in industrial espionage – or, as U.S. Commerce Secretary Wilbur Ross put it at Monday’s press conference, “lying, cheating and stealing.”
Two Canadians, Michael Kovrig and Michael Spavor, are already jailed in retaliation for Ms. Meng’s arrest, and a third, Robert Schellenberg, saw his drug-trafficking sentence suddenly bumped up to death.
Maybe the Chinese government already knew the Huawei case was going to be this big a deal, and that U.S. authorities were dead-set on bringing it to court. It seems like in Canada, Prime Minister Justin Trudeau’s government didn’t. At least, some in Ottawa held out hope the U.S. case might not go ahead. The now-fired Canadian ambassador to China, John McCallum, suggested – in some of the comments that led to his dismissal – that Washington might make a deal with Beijing that would see Ms. Meng freed.
But there isn’t going to be a deal.
Canada can now expect more Chinese wrath. Detaining Canadians hasn’t been a brilliant PR move for Beijing, so it might find other means. But Ottawa is more firmly stuck in the middle.
U.S. acting attorney-general Matt Whitaker gave Canada a shout-out for arresting Ms. Meng and defending the rule of law. And for all the questions about whether the U.S. is out to get Huawei for commercial reasons, it is the rule of law that is important here. And the U.S., unlike China, has it. But Mr. Whitaker’s words won’t shield Canada from Beijing’s anger. Mr. Trudeau can expect more.