By Liz Hay
Elm Staff Writer

On Jan. 28, the United States government levelled criminal charges against Chinese tech company Huawei and its CFO, Meng Wanzhou. Huawei is a major corporation which, according to CNN, is projected to become the world’s top smartphone seller by next year.
Ms. Meng was arrested in Canada back in December at the request of the U.S. government. The Department of Justice is now requesting that she be extradited to the United States.
Additionally, the Justice Department further charged Huawei and its affiliates with criminal offenses including violation of U.S. sanctions against Iran, theft of technology designs from competitor T-Mobile, and the sale of tech products that can be used by the Chinese government for spying.
The U.S. government contends that such practices are characteristic of Chinese businesses. These indictments are set against the backdrop of the U.S.-China trade war which has developed over the last year. Huawei’s alleged actions can be seen as an example of the business practices criticized by President Donald Trump which led to his escalation of tensions with China. The U.S. broadly accuses China, through its tech conglomerates, of stealing U.S. intellectual property and disregarding international business and trade laws.
Huawei, and the Chinese government, deny these accusations.
The U.S.-China trade war has its origins in a 2017 investigation conducted by the U.S. government into China’s trade policies. According to the BBC, the tariffs are planned to eventually affect all goods imported from China, a total value over $500 billion. The Chinese government responded to the U.S. actions by imposing their own tariffs on $110 billion worth of U.S. goods.
The trade war has implications not just for U.S. and Chinese consumers, but also for commodity prices and stability throughout the global economy. International actors like the World Trade Organization have expressed concern about the long-term effects of the world’s biggest economies facing off in a war of attrition.
Due in part to these concerns, the trade war was put on pause in December as both parties hoped to solve issues between the nations more diplomatically. If that is still the goal, U.S. actions against Huawei seem to be an aggressive step in the wrong direction.
Although there are virtually no benefits from a trade war between the U.S. and China, that is not to say that U.S. accusations against Chinese companies and business practices are totally unfounded. The evidence against Huawei is substantial, and the charges brought by the DOJ are just the formal manifestation of years of suspicion and complaints in the business community.
Ideally, the Chinese government will cooperate with U.S. authorities and trade officials to handle the charges against Huawei and Meng without escalating tensions between the two nations further. Chinese corporations have gained a lot of power in the global economy very quickly, and must be held accountable to international standards of trade.
However, the risk of heightening the U.S.-China trade war must be taken into consideration as government officials handle this issue. It might be in the best interests of the United States and its companies to make compromises rather than take a hardline stance against Huawei.

The Elm

Leave a Reply

Your email address will not be published. Required fields are marked *

 

In case you have missed it

In case you have missed it