Earlier this year, six top USA intelligence chiefs voiced their concerns about Huawei phones to the Senate Intelligence Committee, with FBI Director Christopher Wray saying he was "deeply concerned about the risks of allowing any company or entity that is beholden to foreign governments that don't share our values to gain positions of power inside our telecommunications networks".
The Wall Street Journal reported in April that US Department of Justice had opened an investigation into suspected violations of Iran sanctions by Huawei.
Trudeau added that he has had no conversations with the Chinese government about the case, which has said it firmly opposes the arrest and demanded Canada "immediately correct the mistake" and release Meng.
David Mulroney, distinguished senior fellow at the University of Toronto's Munk School of Global Affairs and former Canadian Ambassador to China says the arrest could result in a "deep freeze" between Canada and a country it could very much use to diversify its worldwide trade relations. "The US has identified that China has found a backdoor to enter the US market through venture capitalists and private investors but those are also now shutting down gradually".
China is confident they can reach a trade deal during the 90 days that Trump agreed to suspend US tariff hikes, said a ministry spokesman, Gao Feng.
Connor Campbell, an analysts at Spreadex, wrote: "The Huawei arrest appears to be the straw that broke the camel's back".
She faces possible extradition to the United States after a bail hearing on Friday.
Huawei has clarified from their end that she faces unspecified charges in the NY.
What could be behind it?
Huawei's smaller rival, ZTE (ZTCOF), provides an example of how the USA government could go further.
That same month Washington barred Huawei rival ZTE Corp. from exporting U.S. technology in a separate case over exports to Iran and North Korea.
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The move by the U.S.is related to concerns that Beijing could be using Huawei's technology to spy on Americans.
Hong Kong-listed ZTE, which was subject to a USA banning order earlier his year over security fears before that was reduced to a massive fine, was nearly five percent down.
Visitors pass a Huawei marquee in Barcelona, during the Mobile World Congress past year.
Meng is not only the chief financial officer of Huawei but the daughter of the tech giant's founder, Ren Zhengfei. The Globe and Mail newspaper, citing law enforcement sources, reported that Meng is suspected of trying to evade U.S. sanctions on Iran.
"The company believes the Canadian and U.S. legal systems will ultimately reach a just conclusion".
The Chinese Embassy in Ottawa said her human rights were violated and demanded she be freed.
Meng was arrested in connection with alleged violations of Iran sanctions, an issue that had previously become entangled in US-China trade talks when the Trump administration slapped harsh penalties on Chinese telecoms giant ZTE.
"The Chinese side has lodged stern representations with the USA and Canadian side, and urged them to immediately correct the wrongdoing and restore the personal freedom of Ms. Meng Wanzhou".
Huawei's involvement in 5G has compounded security concerns over the company even further. Huawei is the largest telecommunication equipment company and the world's second largest smartphone maker behind Samsung. It sells more smartphones than Apple (AAPL) and builds telecommunications networks in countries around the world. Since then, Huawei is facing operational difficulties in the U.S. and some other countries like Australia, New Zealand, etc. These include director of the worldwide accounting department, chief financial officer of Huawei Hong Kong and president of the accounting management department, the website said.
Earlier this year, it barred USA companies from exporting to ZTE, effectively shutting down the firm.
Earlier this year, the United States banned American firms from selling parts and software to ZTE, which then paid $1 billion this summer as part of a deal to get the ban lifted. But U.S. officials also worry more broadly that Chinese plans for state-led creation of Chinese champions in robotics, artificial intelligence and other fields might erode U.S. industrial leadership.