Foreign Affairs

Trump’s DOJ Charges Huawei With Fraud Amid Heightened Tensions With US

President_Donald_Trump | circa February 2018 | Official White House Photo by Shealah Craighead

The Department of Justice charged Chinese telecommunications giant Huawei Monday on several counts of fraud as U.S. President Donald Trump applies more pressure on China’s beleaguered economy.

A 13-count indictment against Huawei and its chief financial officer, Meng Wanzhou, accuses Huawei of bank fraud, wire fraud, and violating U.S. sanctions on Iran. Huawei is also charged with conspiring to obstruct justice related to the DOJ’s investigation.

Meng, the CFO of Huawei and daughter of the company’s founder, was arrested in December in Vancouver by the Canadian Justice Department. China warned Canada in December that it faces “severe consequences” if officials don’t release the executive.

DOJ views Meng’s criminal case as separate from the trade tensions between the U.S. and China. The indictment, which was unsealed in New York City, is part of a multiyear investigation into whether Chinese companies are violating U.S. sanctions against Iran.

China was furious following Meng’s arrest. The communist nation sentenced a Canadian citizen to death on Jan. 14 on drug charges in a case that has direct links to Canada’s decision. Robert Schellenberg’s sentence is considered an attempt by China to pressure Canada into releasing Meng.

DOJ’s indictment also comes less than a day after billionaire George Soros sounded off against Trump during a dinner at the World Economic Forum in Davos, Switzerland for not being tougher on Huawei and China in particular.

“Instead of letting ZTE and Huawei off lightly, it needs to crack down on them,” Soros said, referring to two Chinese telecommunications companies working to develop fifth generation smart phone networks. “Regrettably, President Trump seems to be following a different course: make concessions to China and declare victory while renewing his attacks on U.S. allies.”

Trump has meanwhile worked the past few months to turn the screws on Chinese President Xi Jinping. The administration slapped stiff tariffs on $250 billion worth of Chinese products, among a slew of other strong-arm tactics. China returned fire with strategic tariffs of its own. Xi and Trump eventually agreed to a 90-day truce in December and to work toward an agreement.