Canadian Hostage Taking and Trade
The ongoing trade war between the United States and China has resulted in many other countries getting dragged into the conflict. Both sides have levied progressively heavier tariffs on one another in important industry including consumer goods, agricultural products, aluminium, and steel. China and the United States are also taking actions to alleviate economic damage suffered from the trade war. China has been launching increasingly larger stimulus package to support the Chinese economy and especially the state-owned enterprises.
The Trump administration has passed a “farm bill” that includes substantial subsidies for farmers struggling to survive the lack of trade with China. Recently, stakes are even higher in the wake due to arrest of Hua Wei CFO Meng Wan Zhou. China responded with arresting two Canadians over national security concerns. The result is the dragging of one of America’s allies in the Trade War and the use of hostage taking as a way to acquire leverage against one’s adversary. The purpose of this paper is to highlight the current hostage situation between China and Canada, and conclude how this would affect the ongoing trade situation between the US and China
The two Canadian hostages in China are entrepreneur Michael Spavor and ex-diplomat Michael Kovrig. Spavor runs the Paektu Cultural Exchange which is dedicated for cultivating cultural-exchange and trade relations with North Korea. Canadian Foreign Affairs Minister Chrystia Freeland told reporters that they are unable to contact Spavor. He helped organize the Dennis Rodman trip to North Korea in 2013 and 2014. According to the Chinese government, they are both detained over “national security” concerns. Kovrig, meanwhile, took on political reporting assignments over sensitive subjects in China such as the state of Tibetans or Muslim Uighurs. In response to the detainment of Hua Wei CFO Meng Wanzhou due to fraud and breaching US sanctions over Iran. Chinese spokesperson Lu Kang stated that Spavor and Kovrig are being treated according to Chinese law and are unrelated to Meng’s arrest. The Chinese government has stated their displeasure of the arrest of Meng, saying that it is an “abuse of bilateral extradition treaty”.
Threat of hostage arrest will increase anxiety for business owners operating on both sides of the pacific. Hostage taking from China also signals a greater degree of insecurity and braziness to international community. Although useful as a negotiation asset, will be a detriment in the long term in trade with west. Chinese hostage taking may also inflame insecurity among South East Asian countries who are trying to maintain a careful tightrope between the United States and China in an era of increased hostility. The practice of hostage taking sets a dangerous precedence for the future of trade in Asia as anyone doing business in China is at risk of becoming.