Huawei, Venezuela, Brexit: Your Wednesday Briefing
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Huawei struggles to move past growing skepticism, Britain’s Parliament rejects a no-deal Brexit and an island mourns the loss of a lonely duck. Here’s the latest:
What’s next for Huawei?
U.S. officials are poised to formally request that Canada extradite Meng Wanzhou a day after the Justice Department laid out its case against her and Huawei, the Chinese telecommunications company she helps lead. Ms. Meng was arrested nearly two months ago at the behest of the U.S. and is under house arrest in Vancouver.
Huawei denied the charges, and China’s Foreign Ministry called for the release of Ms. Meng.
But the developments could further damage relations between the U.S. and China, leaving Huawei — and Beijing — with very few options for responding or retaliating.
The allegations: The indictments say Ms. Meng and Huawei defrauded four large banks — possibly including HSBC — into clearing transactions with Iran in violation of international sanctions. Prosecutors also claim that the company destroyed evidence, moved potential witnesses back to China and tried to steal a T-Mobile robot named Tappy that is used to test smartphones.
What now? Any retaliation by Beijing could scuttle crucial negotiations set to begin today, aimed at warding off a major escalation in the U.S.-China trade war. Huawei has shuffled its leadership in Washington to shift its focus from sales to repairing relations with the U.S. government.
Impact: Growing skepticism of Huawei is cutting into its business. TPG Telecom, a wireless provider in Australia, halted the construction of a new mobile network that would have used Huawei equipment. And last week, the London-based Vodafone network said it would stop buying Huawei equipment in Europe.
Parliament rejects a ‘hard’ Brexit
British lawmakers, voting on a broad spectrum of amendments to Prime Minister Theresa May’s withdrawal plan, embraced for a measure that, in principle, rules out withdrawing from the E.U. without a deal.
Parliament also rejected delaying Brexit beyond the March 29 deadline.
Surprise move: Hours before the voting session, Mrs. May raised the stakes by promising to reopen negotiations on the agreement — a 585-page text that was painstakingly crafted over more than two years — with the E.U. It was, in effect, a gamble that she could save her plan by asking the bloc for something it has always portrayed as impossible.
The upshot: Mrs. May’s main hope remains that a Parliament that cannot agree on any other course will ultimately opt to support a modestly altered version of her deal for fear of a disastrous no deal Brexit. Critics think she is trying to run down the clock to present them with two options: her plan or no deal.
Support for Venezuelan opposition leader grows
The U.S. State Department said it gave Juan Guaidó, who last week declared himself the interim president of the country, the right to control Venezuelan assets and property in U.S. banks.
Why it matters: The move is part of the U.S. campaign to oust President Nicolás Maduro, whose re-election has been widely contested. Last week, the U.S. recognized Mr. Guaidó’s leadership and urged other allies to follow suit. Earlier this week, American officials imposed tough sanctions against Venezuela’s state-owned oil company to cut off Mr. Maduro’s cash flow.
Impasse: Mr. Maduro still has the backing of the country’s generals and has so far refused to heed calls for fresh elections.
Apple earnings indicate difficult road ahead
After years of expansion and record-setting profits, Apple appears to be entering a period of vulnerability.
The technology giant reported that profits in the most recent quarter were flat from a year earlier, citing an economic slump in China. Demand for iPhones there has slowed, particularly with the rise of cheaper, local alternatives.
The company is also uniquely vulnerable to tariffs against China, where most of its products are assembled, and has not, since the introduction of the iPhone a decade ago, produced anything with the same impact.
Security bug: Reports surfaced that FaceTime could eavesdrop on people, even if recipients don’t answer calls. Apple said it is working on a fix and will release it in a software update later this week. In the meantime, here’s how to disable the feature.
Here’s what else is happening
China: The country failed to meet its own government regulations requiring coal mines to cut back on methane emissions in the five years after 2010, a new study found.
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Blake Wilson and Jennifer Krauss helped with today’s Back Story.
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