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U.S. President Donald Trump is again hinting that he might drop charges against Huawei Technologies Co. Ltd. as part of a trade deal with China – a move that would threaten judicial independence and undermine American law enforcement.

It is unclear whether Mr. Trump could unilaterally end the prosecution. But even floating the possibility puts Canada in an increasingly difficult spot as it processes Huawei chief financial officer Meng Wanzhou’s extradition case, and buttresses China’s assertion that the prosecution is purely political.

At an Oval Office trade meeting with Chinese Vice-Premier Liu He on Friday, Mr. Trump told reporters that he “may or may not include” a resolution to the Huawei situation in the deal he was negotiating with China. Asked whether he would be willing to drop criminal charges against Huawei, Mr. Trump said he would be discussing this with the U.S. Justice Department.

“We’re going to be discussing all of that during the course of the next couple of weeks, and we’ll be talking to the U.S. attorneys. We’ll be talking to the Attorney-General,” he said. “Right now, it’s not something that we’re discussing.”

The United States is pursuing two court cases against Huawei as a result of FBI investigations. One accuses the company of fraud in relation to violations of U.S. sanctions on Iran, and the other of stealing proprietary information about a phone-testing robot from U.S. telecommunications company T-Mobile.

Canada arrested Ms. Meng at the United States’ behest as part of the first case in December. She is currently on bail in Vancouver facing extradition to the United States. In apparent retaliation, China detained two Canadians without charge, former diplomat Michael Kovrig and entrepreneur Michael Spavor. The two men have been held in cells which are kept lit 24 hours a day and subjected to six hours of daily interrogation.

The United States has also banned Huawei from its next-generation 5G networks over concerns the company would steal Americans’ information and ship it back to Beijing. Washington has put pressure on Ottawa to do the same, but the Trudeau government has said it will take time to make up its mind on the matter.

China has claimed Ms. Meng’s arrest is unjust, and motivated by Mr. Trump’s trade war with Beijing. Canada has insisted it is acting in accordance with the rule of law, and U.S. Justice Department officials have said their case is not connected to the President’s trade agenda. But Mr. Trump has undermined this argument by saying he would interfere in Ms. Meng’s case if it would help push economic negotiations ahead with China. “If I think it’s good for what will be certainly the largest trade deal ever made … I would certainly intervene,” he told Reuters in December.

Foreign Affairs Minister Chrystia Freeland fired a broadside at Mr. Trump’s comment after a meeting with her counterpart, U.S. Secretary of State Mike Pompeo, in Washington in December.

“The rule of law and extradition ought not ever to be politicized or used as tools to resolve other issues,” she said. “The extradition process is a criminal-justice process. This is not a tool that should be used for politicized ends.”

Last year, Mr. Trump hit China with a wide array of tariffs in an effort to force China to stop stealing U.S. intellectual property and stop demanding American companies turn over technology to do business in China. Mr. Trump also blames China for hollowing out the U.S. manufacturing sector by drawing away industrial jobs.

He has threatened to increase tariffs further on March 1 if there is no deal.

“I would say it’s more likely that a deal will happen,” he said Friday.

U.S. Trade Representative Robert Lighthizer said technology transfers would be part of any deal.

“The answer is yes, it’s one of the structural issues. It has to be done properly and we’ve made a lot of progress in it, so whoever told you we weren’t just didn’t know what they were talking about,” he said.

Mr. Liu, speaking through an interpreter, also expressed optimism for a pact.

“We believe that it is very likely that it will happen and we hope that … we’ll have a deal,” he said. “The Chinese side is ready to make our ultimate effort.”

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