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The U.S. often takes hostages in trade fights. They usually aren’t live human beings

- December 12, 2018
Supporters hold signs and Chinese flags outside British Columbia Supreme Court during the third day of a bail hearing for Meng Wanzhou, the chief financial officer of Huawei Technologies, on Tuesday in Vancouver. (Darryl Dyck/Canadian Press/AP)

The United States, like other countries, frequently uses the tactic of hostage taking in trade disputes. When it imposes punitive tariffs against another country, it very often targets politically sensitive products to put more pressure on the government. At the World Trade Organization, it is refusing to agree to the appointment of new judges, to try to force other WTO members to accede to its demands. However, hostage taking is usually understood as a metaphor — live human beings aren’t usually involved.

Now, President Trump has changed the game. Huawei Technologies’ chief financial officer, Meng Wanzhou, is out on bail in Canada, where she was detained in response to a U.S. extradition request, relating to possible sanctions violations. The United States has claimed, probably truthfully, that her arrest was unrelated to the trade battle between Washington and Beijing.

[interstitial_link url=”https://www.washingtonpost.com/news/monkey-cage/wp/2018/12/07/the-huawei-arrest-is-causing-a-crisis-in-u-s-china-relations-trump-may-not-even-have-known-about-it/?utm_term=.3dad3ea37c12″]The Huawei arrest made the stock market tank. Trump may not even have known about it.[/interstitial_link]

However, in a Reuters interview Tuesday, Trump linked the arrest to trade negotiations, suggesting that he would “intervene” in the case if he thinks it would be “good for what will be certainly the largest trade deal ever made.” This has potential transformative consequences.

Trump’s statement will heighten Chinese suspicions

Many people in China have believed from the start that the arrest was a deliberate move to put pressure on China’s trade negotiators. Meng is not only a top-ranked executive in one of China’s most important companies. She is the daughter of the company’s founder, who is closely connected to China’s military elite. The United States has suggested the timing of the arrest was not driven by trade talks but by the desire to take advantage of an opportunity to enforce U.S. law: Meng was briefly transiting through Canada, which cooperates closely with the United States on judicial matters. As Robert Williams and Preston Lim have argued:

U.S. negotiators can credibly claim that Meng’s arrest is a product of a professional investigation and an institutionalized U.S. commitment to the rule of law. Many in Beijing will find it impossible to see the arrest as anything but a highly coordinated U.S. campaign of aggression, or perhaps as an act of sabotage by economic nationalists within the Trump administration. Chinese leaders may find it inconceivable that Meng’s arrest was not carefully calculated for geopolitical effect. But they shouldn’t. It’s no more difficult to believe than the fact that a U.S. president whose political party controls both houses of Congress cannot enact whatever policies he likes and must obey the adverse decisions of an independent judiciary.

Trump, by explicitly linking the arrest to trade talks, has turned Meng into a hostage to the success of these negotiations. This retrospectively weakens U.S. claims that the arrest was driven by U.S. commitments to the rule of law. Williams and Lim are likely right about why the Justice Department sought Meng’s arrest (which has more to do with aggressive U.S. pursuit of its legal and security objectives than with trade). But Meng’s detention has now become a bargaining chip in a set of economic negotiations.

This damages U.S. credibility

As Abraham Newman and I have argued, the United States has aggressively weaponized interdependence in pursuit of its security objectives, using regulatory clout, the international dollar clearing system and financial information networks as tools of extraterritorial influence. This strategy, however, has limits. The more that the United States weaponizes international networks toward its own ends, the more that other states are going to want to withdraw from them. As Tyler Cowen has discussed, these arguments have specific consequences for the Huawei case, which will likely lead China and other nations to consider ways that they can insulate themselves from aggressive U.S. legal strategies.

There are further questions. The U.S. commitment to the rule of law is necessarily hypocritical. The United States wants on the one hand to exploit legal rules to restrain others for its own selfish ends, and on the other to be as little restrained by those rules as possible. Yet if you are to be a successful hypocrite, you need to at least pretend to respect the norms that you say are important. Thus, for example, if you arrange for the arrest of a powerful foreign executive, you should justify the arrest in terms of general legal principles rather than negotiating tactics. As Martha Finnemore and I have argued, Trump is not notably skilled at deploying hypocrisy, instead preferring blunt power politics. This damages the United States’ ability to persuade others to accede to its understanding of the rule of law, since the United States itself does not even bother to pretend to be committed to it. In this case, for example, Canadian courts will have to decide whether the U.S. extradition request is politically motivated. Trump’s statement hands Meng’s lawyers evidence that they can use to try to undermine the U.S. case.

It validates hostage taking by other countries

After Meng’s arrest, China threatened retaliation against Canada. It is probably no coincidence that former Canadian diplomat Michael Kovrig was apparently arrested by Chinese authorities. He is likely being held as a bargaining token to put pressure on the Canadian government and Canadian courts.

This is not a new tactic for China. For example, there is a long history of business executives disappearing from Hong Kong, only to mysteriously turn up on the mainland, tearfully repenting on television for their purported crimes. However, it becomes much more difficult for nations such as the United States to push back against these tactics when the Trump administration too appears to be using hostage politics to achieve its political ends. Again, a combination of hypocrisy and (often sporadic) commitment to broad ideals has served the United States well in the past, but will be far more difficult to resort to in future.