US Files Charges Against Huawei. What About the Trade Tariffs?

US%20Files%20Charges%20Against%20Huawei.%20What%20About%20the%20Trade%20Tariffs%3F
source: Flickr

The US Department of Justice has officially filed criminal charges against Huawei and its chief financial officer, Meng Wanzhou, including accusations of wire and bank fraud, obstruction of justice and theft of intellectual property of T Mobile technology. In December last year, Ms. Meng, the daughter of the founder of Huawei, was arrested in Canada on US request for allegedly evading sanctions on Iran.

The first 10-count indictment the government unsealed concerned a T-Mobile's novel robot technology called ''Tappy.'' As Huawei delivered mobile phones to T-Mobile, the Chinese company had access to some information about Tappy. Back in China, Huawei had also been testing a similar robot. According to the U.S. prosecutors, Huawei encouraged its employees to inquire how Tappy worked, which was a violation of the non-disclosure agreements between Huawei and T-Mobile, the U.S. Department of Justice pointed out. Moreover, Huawei's employees had to provide photos and serial numbers of various Tappy components. As per the court's documents, one of those employees had been caught in the act, trying to steal Tappy's arm by putting in his bag. The U.S. prosecutors also found out that Huawei rolled out a bonus system to reward the employees who assisted in the intellectual theft.

The second 13-count indictment the government unveiled, was against Huawei and its chief financial executive, Meng Wanzhou. It revealed details about a scheme by Huawei to deceive the U.S. financial authorities about its business in Iran. Meng claimed that Skycom, a Hong Kong-based company, conducting business with Iran, was an affiliate of Huawei, while according to the prosecutors, it was its subsidiary. As per the allegations, Meng managed to mislead an unnamed U.S. bank that Huawei's work with Skycom was a ''regular business operation.'' Reportedly, the bank in question was HSBC.

Meng, who was arrested in Canada in December last year and was released on a USD 7.6 million bail later, has always been declining the U.S. allegations, causing a diplomatic thunderstorm between USA, Canada, and China. The U.S. Department of Justice reaffirmed Monday its intention to move forward with the Meng's extradition in Washington. The court hearing is set for February 6.

In addition to that, Congress is working on legislation to forbid the sale of U.S. parts to any Chinese telecom company that has violated US export control or sanctions, a measure, that would severely impact Huawei.

The charges come in a moment when Washington and Bejing have been trying to cut a deal on trade before March 1, when the US tariffs on Chinese products will increase from 10 percent to 25 percent. The Chinese Vice Prime Minister Liu He is expected to visit USA on Wednesday. 

Do you agree that President Trump should intervene in Meng's case to help out reach a trade deal with China?