The arrest of Huawei chief financial officer Meng Wanzhou is a dangerous move by US President Donald Trump’s administration in its intensifying conflict with China. If, as Mark Twain reputedly said, history often rhymes, our era increasingly recalls the period preceding 1914. As with Europe’s great powers back then, the United States, led by an administration intent on asserting America’s dominance over China, is pushing the world toward disaster.
The context of the arrest matters enormously. The US requested that Canada arrest Meng in the Vancouver airport en route to Mexico from Hong Kong, and then extradite her to the US. Such a move is almost a US declaration of war on China’s business community. Nearly unprecedented, it puts American businesspeople traveling abroad at much greater risk of such actions by other countries.
The US rarely arrests senior businesspeople, US or foreign, for alleged crimes committed by their companies. Corporate managers are usually arrested for their alleged personal crimes (such as embezzlement, bribery or violence) rather than their company’s alleged malfeasance.
Yes, corporate managers should be held to account for their company’s malfeasance, up to and including criminal charges; but to start this practice with a leading Chinese businessperson, rather than the dozens of culpable US CEOs and CFOs, is a stunning provocation to the Chinese government, business community, and public.
Meng is charged with violating US sanctions on Iran. Yet consider her arrest in the context of the large number of companies, US and non-US, that have violated US sanctions against Iran and other countries. In 2011, for example, JPMorgan Chase paid US$88.3 million in fines for violating US sanctions against Cuba, Iran and Sudan. Yet chief executive officer Jamie Dimon wasn’t grabbed off a plane and whisked into custody.
And JPMorgan Chase was hardly alone in violating US sanctions. Since 2010, the following major financial institutions paid fines for violating US sanctions: Banco do Brasil, Bank of America, Bank of Guam, Bank of Moscow, Bank of Tokyo-Mitsubishi, Barclays, BNP Paribas, Clearstream Banking, Commerzbank, Compass, Crédit Agricole, Deutsche Bank, HSBC, ING, Intesa Sanpaolo, JP Morgan Chase, National Bank of Abu Dhabi, National Bank of Pakistan, PayPal, RBS (ABN Amro), Société Générale, Toronto-Dominion Bank, Trans-Pacific National Bank (now known as Beacon Business Bank), Standard Chartered, and Wells Fargo.
None of the CEOs or CFOs of these sanction-busting banks was arrested and taken into custody for these violations. In all of these cases, the corporation – rather than an individual manager – was held accountable. Nor were they held accountable for the pervasive lawbreaking in the lead-up to or aftermath of the 2008 financial crisis, for which the banks paid a staggering $243 billion in fines, according to a recent tally.
In light of this record, Meng’s arrest is a shocking break with practice. Yes, hold CEOs and CFOs accountable, but start at home in order to avoid hypocrisy, self-interest disguised as high principle, and the risk of inciting a new global conflict
In light of this record, Meng’s arrest is a shocking break with practice. Yes, hold CEOs and CFOs accountable, but start at home in order to avoid hypocrisy, self-interest disguised as high principle, and the risk of inciting a new global conflict.
Quite transparently, the US action against Meng is really part of the Trump administration’s broader attempt to undermine China’s economy by imposing tariffs, closing Western markets to Chinese high-technology exports, and blocking Chinese purchases of US and European technology companies. One can say, without exaggeration, that this is part of an economic war on China, and a reckless one at that.
Huawei is one of China’s most important technology companies, and therefore a prime target in the Trump administration’s effort to slow or stop China’s advance into several high-tech sectors.
America’s motivations in this economic war are partly commercial – to protect and favor laggard US companies – and partly geopolitical. They certainly have nothing to do with upholding the international rule of law.
The US is targeting Huawei especially because of the company’s success in marketing cutting-edge fifth-generation (5G) wireless technologies globally. The US claims the company poses a specific security risk through hidden surveillance capabilities in its hardware and software. Yet the US government has provided no evidence for this claim.
A recent diatribe against Huawei in the Financial Times is revealing in this regard. After conceding that “you cannot have concrete proof of interference in ICT [information and communications technology], unless you are lucky enough to find the needle in the haystack,” the author simply asserts that “you don’t take the risk of putting your security in the hands of a potential adversary.” In other words, while we can’t really point to misbehavior by Huawei, we should blacklist the company nonetheless.
When global trade rules obstruct Trump’s gangster tactics, then the rules have to go, according to him. US Secretary of State Mike Pompeo admitted as much last week in Brussels. “Our administration,” he said, is “lawfully exiting or renegotiating outdated or harmful treaties, trade agreements, and other international arrangements that don’t serve our sovereign interests, or the interests of our allies.” Yet before it exits these agreements, the administration is trashing them through reckless and unilateral actions.
The unprecedented arrest of Meng is even more provocative because it is based on US extra-territorial sanctions, that is, the claim by the US that it can order other countries to stop trading with third parties such as Cuba or Iran. The US would certainly not tolerate China or any other country telling American companies with whom they can or cannot trade.
Sanctions regarding non-national parties (such as US sanctions on a Chinese business) should not be enforced by one country alone, but according to agreements reached within the United Nations Security Council. In that regard, UN Security Council Resolution 2231 calls on all countries to drop sanctions on Iran as part of the 2015 Iran nuclear agreement. Yet the US – and only the US – now rejects the Security Council’s role in such matters.
The Trump administration, not Huawei or China, is today’s greatest threat to the international rule of law, and therefore to global peace.
Copyright: Project Syndicate, 2018.
www.project-syndicate.org
That unspoken threat is all that’s needed to achieve everything China would want from this. I expect a great many US executives are reviewing their travel plans right now. Trump was complaining about structural roadblocks to Americans doing business in China. What does he do about it? He adds yet another structural roadblock to Americans doing business in China. There he goes, Making China Great Again, and Making Canada Great Again, and Making the EU Great Again, and Making Russia Great Again, and Making NK Great Again. Did I miss anyone?
Seems the only thing Trump does for Americans is given everyone in the world another reason to despise them. Oh well, they voted that guy in. The ones that didn’t are too politically weak and ineffectual to do anything about it. Their political system of checks and balances has proven useless. They deserve Trump, and the disrespect he’s earning them. If they want to change that, they’re going to have to rediscover democracy and how it actually works. Lazy and apathetic gets you Trump’d.
Malaysia Govt should repeal the Bumi Patra policies, the CCP demand they treat their ethnic Chinese as well as we treat our Uighurs.
Malaysia Govt should repeal the Bumi Patra policies, the CCP demand they treat their ethnic Chinese as well as we treat our Uighurs.
Comrade lets not mention the CFC’s recently produced in China against the UN protocol
Comrade lets not mention the CFC’s recently produced in China against the UN protocol
Cathy Seuss Comrade you are up late (or early) if you really live in the Eastern States. RMB 0.5 for you.
Cathy Seuss Comrade you are up late (or early) if you really live in the Eastern States. RMB 0.5 for you.
First the Westerners sail through our waters waving their bigger weapons, then they arrest a friend of my children (not forgetting the regular pots of honey).
A huge humilation for the CCP.
First the Westerners sail through our waters waving their bigger weapons, then they arrest a friend of my children (not forgetting the regular pots of honey).
A huge humilation for the CCP.
Galen Linder Then in the mean time the Huawei executive will spend her life behind bars and the US can kidnap more foreign nationals as they please?
Pray tell, why would the US business community do anything if China is not willing to?
The only scenario I would see the US business community doing anything is that China makes it clear their persons or property will be at risk. You don’t stop a bully by been a punching bag, you stop them by fighting back.
Galen Linder Then in the mean time the Huawei executive will spend her life behind bars and the US can kidnap more foreign nationals as they please?
Pray tell, why would the US business community do anything if China is not willing to?
The only scenario I would see the US business community doing anything is that China makes it clear their persons or property will be at risk. You don’t stop a bully by been a punching bag, you stop them by fighting back.
Malaysia government should issue a warrant for the arrest of the C-suite at Goldman Sach. Lloyd Blankfein and others should be extradited to Malaysia for helping the ex-Prime Mininster of Malaysia to scammed and sheltered billions and billions of funds hidden in the Cayman Island or some other locales.
What happened to AIG’s CEO Martin Sullivan who ran AIG to the ground with his fraudalent Credit Default Swap.
Malaysia government should issue a warrant for the arrest of the C-suite at Goldman Sach. Lloyd Blankfein and others should be extradited to Malaysia for helping the ex-Prime Mininster of Malaysia to scammed and sheltered billions and billions of funds hidden in the Cayman Island or some other locales.
What happened to AIG’s CEO Martin Sullivan who ran AIG to the ground with his fraudalent Credit Default Swap.
Very much the wrong approach. This move by Trump will be universally condemned. China’s best strategy is to loudly reject such moves as a matter of principle and reassure US business that it would never stoop to such gangsterism, thereby driving a wedge between Trump and the US business community.
Warren Anderson, a US citizen who is the Chairman of Union Carbide that owns the chemical plant in Bhopal was never handed to India. The Bhopal incident was a disaster that stretches a few generations caused by the toxic chemical leak.
Another rude person to block. Goodbye.
Dont forget about the Trump/Kushner deal of the century and what it means for the Palestinians. It shows how the US’ political interest and that of Israel overrides and bulldozes everything that is in their way and their attitude is to do whatever it takes to achieve their objectives. The ME mess is a very good example of the past actions of the US. Laws are just but one of the tools to be utilised in their pursuit.
Dont forget about the Trump/Kushner deal of the century and what it means for the Palestinians. It shows how the US’ political interest and that of Israel overrides and bulldozes everything that is in their way and their attitude is to do whatever it takes to achieve their objectives. The ME mess is a very good example of the past actions of the US. Laws are just but one of the tools to be utilised in their pursuit.
The big Question hanging over the world`s head right now is what will China do about this latest outrage. What will the world do about this outrage? Will countries start cancelling extradition treaties with the USA? There is no way that they can let this stand. I am sure with a little digging that they can find a couple of hundred American CFOs and CEOs culpable of many corporate crimes and could pick them up and hold them, for trial. And just like they are saying about Mrs. Meng being a flight risk they could make the argument that the US CEOs and CFOs would pose a severe flight risk and hold them in jail until trial.Now that would be interesting indeed.
The US trying to hold back China`s progress is even more hopless than the Dutch boy holding back the North Sea with his thumb in the hole in the dyke.
Really good article pointing out how the kettle is calling the pot black.
The big Question hanging over the world`s head right now is what will China do about this latest outrage. What will the world do about this outrage? Will countries start cancelling extradition treaties with the USA? There is no way that they can let this stand. I am sure with a little digging that they can find a couple of hundred American CFOs and CEOs culpable of many corporate crimes and could pick them up and hold them, for trial. And just like they are saying about Mrs. Meng being a flight risk they could make the argument that the US CEOs and CFOs would pose a severe flight risk and hold them in jail until trial.Now that would be interesting indeed.
The US trying to hold back China`s progress is even more hopless than the Dutch boy holding back the North Sea with his thumb in the hole in the dyke.
Really good article pointing out how the kettle is calling the pot black.