Arrests Multiply as Huawei Fallout Spreads

(Bloomberg) --

The Huawei affair seems to get messier by the day.

China confirmed it’s questioning a second Canadian citizen, Michael Spavor, who was held in the city of Dandong near the North Korean border. For years, Spavor has escorted foreigners – including former NBA star Dennis Rodman – to meet North Korean leader Kim Jong Un and other officials.

His detention follows the disappearance of former Canadian diplomat Michael Kovrig, who ran in the same circle of foreign experts on China’s ties with North Korea. Officials in Beijing said the two men are “suspected of engaging in activities endangering national security,” without saying if the cases are linked.

The incidents emerged shortly after Canada arrested Huawei Technologies Chief Financial Officer Meng Wanzhou, daughter of the company’s billionaire founder, in response to a U.S. extradition request. That action shook global markets worried about the impact on a tentative U.S.-China trade truce. Investors’ eyes now are on a major policy speech next week by Chinese President Xi Jinping.

President Donald Trump has said he may intervene in Meng’s case on national-security grounds if it boosts chances for a trade deal with China. But that would risk undermining the U.S. justice system and endangering Americans abroad by making them potential bargaining chips, as well as enraging Congress.

Global Headlines

Struggling on | U.K. Prime Minister Theresa May is in Brussels today to seek concessions from European Union leaders for her much-loathed Brexit agreement, after the failed attempt to oust her by members of her Conservative Party. The parliamentary arithmetic for passing the accord still looks impossible, and the risk of a chaotic no-deal Brexit is growing. Click here for our Balance of Power special on last night’s leadership drama.

Inside player | Nancy Pelosi has struck a bargain with dissident Democrats to seal the support she needs to return as speaker of the U.S. House, a dozen years after she became the chamber’s first woman leader. The pact to limit her time in power is a concession to those agitating for a new generation of leaders. But it also demonstrates Pelosi’s deal-making skills as her party regains power.

Missed opportunity | Trump has rebuffed numerous opportunities to secure billions in funding for a border wall, and, with Democrats set to control the House, that goal could now be out of reach for good, Sahil Kapur and Steven T. Dennis write. With the two sides at an impasse, there’s heightened risk of a partial government shutdown after Dec. 21, and Republicans are expressing regrets over the deal that slipped away.

Turf war | Locked in a struggle with Russia for influence in the Balkans, NATO has revived a membership plan for Bosnia-Herzegovina, site of Europe’s worst violence since World War II. While Bosnia’s Muslim and Croat leaders welcomed the proposal, its Serbian representative, an ally of Russian President Vladimir Putin, said membership would be a “humiliation,” after NATO bombed Bosnian Serb forces in the 1990s Yugoslav wars.

Trump’s troubles | Fresh details emerged in court papers yesterday about the way Trump loyalists conspired to keep U.S. voters from learning about the then-candidate’s alleged affairs. Greg Farrell, David Voreacos and Polly Mosendz take a closer look at how the tawdry tale of a hush money payment to a porn actress has ballooned into an investigation of considerable peril to the president and his associates.

What to Watch

• The Senate plans to vote today on a resolution to withdraw U.S. support for Saudi Arabia’s military campaign in Yemen, a measure proposed as a punishment for the killing of columnist Jamal Khashoggi.
• EU lawmakers may call for a conflict-of-interest probe into billionaire Czech Prime Minister Andrej Babis over allegations he’s failed to sever ties with his $7 billion business empire that gets subsidies from the bloc.

And finally…’Tis the season for rebellion. While the U.K.’s May regroups, French President Emmanuel Macron’s budget concessions haven’t eased the anger of Yellow Vest protesters, who are starting to enjoy the radical life. What began as a tax revolt has become a cultural movement united by contempt for Macron’s leadership style. “He’s a young, arrogant banker who thinks he knows it all,” said one protester.

--With assistance from Kathleen Hunter, Stuart Biggs and Peter Laca.

To contact the editor responsible for this story: Anthony Halpin at thalpin5@bloomberg.net

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