Business Why the Arrest of Huawei’s CFO Has Helped Send Stock Markets Into a Tailspin Published 6 days ago on December 6, 2018 By Frank Couper Share Tweet Asian indices plummeted today—Nikkei 225 down 1.9%, Hang Seng down 2.5%, Shanghai Composite down 1.7%—and Europe’s Stoxx 600 is down 1.9% at the time of writing. The main catalyst for the continuation of this week’s selloff was the arrest in Canada of Sabrina Meng Wanzhou, the chief financial officer of Huawei and the daughter of company founder Ren Zhengfei. Meng faces extradition to the U.S., where investigators are probing Huawei’s alleged non-compliance with sanctions on Iran. Is the timing of the arrest deliberate? That’s an open question at this point—but either way, it could not be more tumultuous in effect. China, which has spent the week thus far making conciliatory gestures to the U.S. in an attempt to bring the trade war to an end, is furious and is demanding Meng’s release. “China should be fully prepared for an escalation in the trade war with the U.S., as the U.S. will not ease its stance on China, and the recent arrest of the senior executive of Huawei is a vivid example,” thundered the state-run Global Times in a tweet bearing an image of flag-emblazoned fists. Meanwhile, the substantially more independent South China Morning Post reported today that Meng and her father recently told Huawei employees that strict compliance with regulations was sometimes not financially feasible and could be avoided. Not a good look at this time. The Meng arrest wasn’t the only thing roiling the Asian markets today—Apple suppliers’ shares have tumbled again after camera-lens supplier Largan Precision revealed a 28% fall in year-on-year monthly revenues. The end of iPhone sales growth is a major factor here—Apple was this year displaced as the world’s second-biggest smartphone producer by, you guessed it, Huawei—but again the trade war is lurking in the periphery. Key contractors whose stock fell, Pegatron and Foxconn, were reported this week to have been planning factories outside China in order to mitigate the impact of tariffs. Nobody will blame them for scrambling. At this point it’s fair to say most of the goodwill coming out of last weekend’s G20 meeting between Presidents Trump and Xi has evaporated. Hold onto your hats. A version of this story first appeared in Fortune’s CEO Daily newsletter. Subscribe here. This story was originally published by Fortune Share this:Click to share on WhatsApp (Opens in new window)Click to share on Twitter (Opens in new window)Click to share on Facebook (Opens in new window)Click to share on Google+ (Opens in new window)Click to share on Telegram (Opens in new window)Click to share on Reddit (Opens in new window)Click to share on Skype (Opens in new window) Related Related Topics:CommentaryFinanceStock market Up Next Lyft Files for What Is Expected to Be One of the Hottest IPOs in 2019 Don't Miss Sony PSZ-HC1T USB 3.1 Gen 1 hard drive: A stylish and rugged portable storage workhorse Continue Reading You may like Elon Musk on 60 Minutes, “I don’t really want to try to adhere to some CEO template”: CEO Daily for December 10, 2018 Forcing Facebook to Behave: Why Consent Decrees Are Not Enough Slack Hires Goldman Sachs to Lead Its IPO Planned for 2019, Report Says Follow Us On Flipboard Magazine. Latest U.S. Politics17 mins ago Celebs hawking Cîroc vodka didn’t mention paid ad deal: FTC Sean “Diddy” Combs helped to make Cîroc a best-selling vodka — but he and scores of other celebs never said... Business1 hour ago How Eddie Redmayne Inspired Glossier’s Best-Selling Cleanser Glossier, the hit e-commerce beauty brand that recently opened a flagship store in New York, announced Tuesday that it will... Local2 hours ago Meng Wanzhou: Trump could intervene in case of Huawei executive Image copyright Reuters Image caption Meng Wanzhou has said she will contest allegations of fraud Donald Trump says he could... Local3 hours ago ‘If you Google the word idiot, a picture of Donald Trump comes up?’ Google’s Chief executive Sundar Pichai went in front of US Congress to defend his company to lawmakers. He faced questions... Entertainment3 hours ago Duchess Meghan Gives a Sweet Nod to Father-in-Law Prince Charles Meghan, Duchess of Sussex on stage during The Fashion Awards 2018Tristan Fewings/BFC/Getty Images A sweet statement! Duchess Meghan gave a... Most Read Local1 week ago Wilder v Fury: Stunning draw in the WBC world heavyweight title fight Sports5 days ago Maurizio Sarri is steering Chelsea away from top four for second year running unless these changes are made, says Adrian Durham Sports5 days ago Who are the two best central defenders in the world?