The arrest and possible extradition to the United States of Meng Wanzhou, the chief financial officer of Chinese communications giant Huawei, in Canada for possible sanctions violations made the stock market tank. However, it is not just a simple criminal case, or even a crude effort to exert economic pressure on China. Instead, as we explain below, it shows how the geostrategic relationship between the Washington and Beijing is changing.
The arrest may not have been part of Trump’s trade strategy
Unsurprisingly, Chinese commentators think that the arrest was intended by the United States to put trade pressure on China. This theory is supported by the apparent comments of unnamed administration officials that they can use the arrest for bargaining leverage.
However, there is reason to suspect that the arrest happened because one part of the Trump administration didn’t know what the other was doing. The United States and China interact on a whole host of issues, including trade, sanctions, innovation policy and supply chains. These issues are becoming increasingly interconnected — but the parts of the U.S. government that deal with them are not. U.S. negotiators may not have coordinated with the Justice Department officials who are demanding the extradition of Chinese business leaders, or even known that the arrests were planned.
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