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Hopes of a breakthrough in the US-China trade talks have taken a resounding knock, after American authorities hit technology firm Huawei with a string of criminal charges.
The US Justice Department has charged Huawei of bank fraud, obstruction of justice, and conspiracy to launder money related to allegations that it conspired to violate Iranian sanctions. Chief financial officer Meng Wanzhou has also been charged, and faces extradition to the US.
Meng and Huawei are accused of using a subsidiary, Skycom Technologies, to do business with sanctioned Iran – a breach of the International Emergency Economic Powers Act (IEEPA). US officials believe Huawei committed fraud by lying to banks, thus misrepresenting their relationship with Skycom.
Huawei is also accused of stealing a robotic technology from the US carrier T-Mobile. Acting Attorney General Matthew Whitaker said Huawei had made a “concerted effort” to steal this smartphone-testing system.
The company denies the charges, pointing that that it has already reached a civil settlement with T-Mobile over ‘Tippy’.
FBI director Christopher Wray said the charges followed years of investigative work, and suggested that Huawei shouldn’t be welcome in the US at all.
“These cases make clear that, as a country, we must consider carefully the risk that companies like Huawei pose if we allow them into our telecommunications infrastructure. The FBI does not—and will not—tolerate businesses that violate our laws, obstruct our justice, and jeopardize our national security.”
China has swiftly hit back, calling the charges unfair and immoral.
The move comes just days before a Chinese delegation led by Vice Premier Liu He arrived in Washington for crucial trade talks. Unless an agreement is reached in the next month, Donald Trump will hike the tariff on thousands of Chinese products from 10% to 25%, potentially hurting trade and adding to the economic slowdown.
Also coming up today
The pound could be volatile tonight, as MPs vote on a series of Brexit amendments – including Graham Brady’s plan to remove the Irish backstop, and Yvette Cooper’s move to rule out No-Deal and force a delay to Brexit.
Parliament’s Treasury committee will also put Brexit under the microscope; they’ll hear from John Glen MP, Economic Secretary to the Treasury, Andrew Bailey, CEO of the Financial Conduct Authority, and deputy Bank of England governor Sam Woods this morning.
Plus, new US housing and consumer data will show how America’s economy is faring in the face of the trade war.
- 9.15am GMT: Treasury committee hearing on the UK’s economic relationship with the EU
- 2pm GMT: Case-Shiller index of US house prices for November
- 3pm GMT: US consumer confidence for January