A former U.S. ambassador to China says that linking the trade dispute to national security issues will only make things more complicated for American authorities preparing a formal request to extradite a senior Huawei executive.
Huawei CFO Meng Wanzhou was arrested in Canada on Dec. 1, at the request of U.S. authorities who say her company violated U.S. sanctions on Iran and may have made illegal transactions with HSBC. She is currently on bail but the U.S. has until the end of January to file an extradition request.
"I think it's always a mistake to try to link trade issues with national security issues," Max Baucus, a former U.S. ambassador to China, told CNBC's "Squawk Box" on Thursday.
"They should not be mixed together generally and, unfortunately, as (Canada's) Ambassador McCallum said, President (Donald) Trump has suggested linkage that he may not seek extradition of Meng in exchange for China behaving, in Trump's view, on trade. That's a big mistake," Baucus said.
Baucus was referring to comments by John McCallum, Canada's ambassador to China, who told Chinese-language media that Meng had strong arguments against her extradition to the U.S. partly due to Trump's politicization of the case. He said, however, that it was likely Huawei, and other companies, broke American law by sending materials to Iran in violation of U.S. sanctions agreements.
Trump told Reuters in December that he would intervene in the Justice Department's case against Huawei. "If I think it's good for what will be certainly the largest trade deal ever made — which is a very important thing — what's good for national security — I would certainly intervene if I thought it was necessary," he told the news agency.
"Frankly, I think it further complicates the ability of a Canadian judge to extradite Meng to (the) United States," Baucus told CNBC.
According to Reuters, once a formal request is received, a Canadian court must decide within 30 days if there's enough evidence to support extradition, and Canada's Minister of Justice must give a formal order.
"Whenever a chief executive starts to voice his or her thoughts on the case, that's a huge additional complication for the prosecution," Baucus added. "In this case, it's President Trump's statement with respect to the Meng case ... it makes it harder for the prosecution to get the extradition."
Earlier this week, Canadian newspaper Global and Mail reported that the U.S. has told Canada it will formally request for Meng's extradition — though no timeline was specified.
For its part, China has demanded the U.S. drop the extradition request. According to Canada, Beijing detained more than a dozen of its citizens after Meng's arrest.
Baucus warned that if the U.S. extradition request is granted, it would have a major impact on the U.S.-China relationship.
The world's two largest economies had been embroiled in a trade war in recent months, which roiled markets and sparked concerns over the health of the global economy. Late last year, Beijing and Washington agreed to a temporary pause on applying new tariffs in order to work out a mutually agreeable trade deal.
Huawei is one of China's largest companies. The U.S. government has for years taken issue with the tech giant over its alleged espionage ties to the Chinese government and has accused the company of intellectual property theft.
— Reuters and CNBC's Kate Fazzini contributed to this report.