Meng Wanzhou, chief financial officer of smartphone maker Huawei and daughter of Huawei founder Ren Zhengfei, was arrested on Saturday in Canada and has to be extradited to the United States. The arrest message was released Wednesday, December 5th.
Allegedly Meng has been accused of violating US sanctions against Iran.
Former hedge fund manager, writer and host of CNBC's Mad Money, Jim Cramer says Meng's arrest will cause US technology companies doing business in China to lose value.
Cramer told investors that arrest means "every technology company doing a large amount of business in China, including Apple or Micron or Intel or Skyworks or Qualcomm Broadcom, is worth a little less than yesterday."
Huawei, one of China's largest companies, is the second largest smartphone maker in the world and is a serious adversary to Samsung and Apple, with Qualcomm and Intel supplying Huawei with smartphone parts.
Meng's arrest may well be also affect US-China relations, which have been tense for months due to trade relations.
Cramer said this The arrest of Huawei's Huawei Chief Financial Officer, an "escalation" in tensions, was "one of the biggest understatements of the year "
" To say that this could further disrupt further negotiations seems appropriate until we find me We must imagine that further downgrades are imminent [and]. These technology stocks could become even more painful, unless the CFO is allowed to return to China or at least be fired on his own. Even then we are here in seriously unknown waters. With the exception of more technology related to China, caution is needed until we know more.
For Cramer, the arrest would be another boost for US officials who are against China's rise to ensure that the world's second largest economy eases, including Vice President Mike Pence and the Director of Trade and Industry, Peter Navarro.
"These guys want to maintain America's place as the world's only superpower. They believe that some pain must be accepted, even if it affects corporate profits, to prevent China from questioning US hegemony. This gives the hardliners a lot of ammunition because it shows that trading with China is more than just making money.
One day, after Meng's arrest was reported, stock holdings fell rapidly, and the Dow Jones Industrial Average 2's share price daily losses reached more than 1
Read related: CFO arrested by Huawei in Canada, extradition to US
CFO arrested by Huawei in Canada, extradition to US