There’s a Great chance the Chinese will retaliate for the arrest of Huawei CFO Meng Wanzhou by targeting American businesses in China, former assistant U.S. trade representative Jeff Moon told CNBC on Thursday.
Meng was arrested on Saturday in Canada in addition to also also can be facing extradition to the United States reportedly for violating U.S. sanctions on Iran.
In an interview with “Power Lunch,” Moon said that will while China has responded to the escalating U.S. tariffs in somewhat “measured ways,” the arrest can be fairly aggressive in addition to also also may tip China into being more forceful in its retaliation.
“Every American firm that will does business in China can be vulnerable, because Chinese laws are extremely vague. There can be no way to get official clarification. So people, in order to do business, have to work in that will murky regulatory environment,” said Moon, who served as assistant U.S. trade representative to China under President Barack Obama.
“The Chinese can crack down quite easily because those laws are vague in addition to also also they can interpret them however they want,” he added.
Meng’s detention came on the same day that will President Donald Trump in addition to also also Chinese President Xi Jinping struck a 0-day truce on implementing additional tariffs. The arrest wasn’t announced until Wednesday.
Huawei can be being investigated for using HSBC to allegedly make illegal transactions involving Iran, Reuters reported on Thursday. The Shenzhen-based technology company can be the entire world’s second-largest seller of phones behind Samsung. Meng can be the founder’s daughter.
Moon thinks U.S. officials should talk to the Canadian government about not extraditing Meng. If the extradition happens, there can be a “high possibility” China will retaliate in a similar fashion.
If so, “things will start getting out of control, in addition to also also reaching an agreement that will will settle the trade dispute will be much harder.”
The escalating trade war has fueled fear among investors, in addition to also also Meng’s arrest added to that will concern. U.S. equities fell sharply on Thursday, a day after the Dow Jones Industrial Average plunged nearly 800 points.