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The arrest happened at about the same time that President Donald Trump dined with Chinese President Xi Jinping in Buenos Aires last Saturday (Dec 1) to discuss the trade war between the countries.

Canadian Justice Department spokesman Ian McLeod said the U.S.is seeking Meng's extradition, but couldn't provide further details about the case because of the publication ban in effect at Meng's request. US authorities have not disclosed circumstances surrounding Meng's arrest, but a person familiar with the matter told Reuters the arrest relates to violations of USA trade sanctions.

But China's government says that she hasn't broken any US or Canadian laws, and is demanding that Canada "immediately correct the mistake" and release her. The arrest has been made by Canadian law enforcement at the request of the USA over violating the Iran sanctions.

China's embassy in Ottawa has also branded Meng's arrest as a serious violation of human rights.

Huawei said it was "not aware of any wrongdoing by Ms Meng". Authorities have suspected the company has been involved in defying sanctions on Iran since 2016, when the USA investigated Huawei's Chinese rival ZTE over similar violations.

The charges remain unknown due to a court restriction but the United States has been investigating Huawei over possible violation of Iran sanctions. Huawei is the largest telecommunication equipment company and the world's second largest smartphone maker behind Samsung.

U.S. national security officials have said Huawei poses a security risk due to its alleged close links to the Chinese government. DoubleLine Capital CEO Jeffrey Gundlach told Reuters on Tuesday that the USA economy is "poised to weaken".

The detention of Meng, who takes her family name from her mother and has also used the English first names "Cathy" and "Sabrina", has once again thrown the spotlight on Huawei at a time of heightened global concerns over electronic security.

Dow futures slide after the arrest of Huawei CFO Meng Wanzhou in Canada; Doug McKelway reports from the White House.

As well as the CFO, she is deputy chairwoman of Huawei and a daughter of the company's founder.

Sen. Mark Warner of Virginia called Chinese telecommunications giant Huawei a "threat to our national security" and urged Canada to exclude Huawei equipment from its 5G mobile phone network.

How do US authorities arrange arrests in foreign countries?

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The arrest of a top Chinese technology executive should have been a triumphant moment for the Trump administration. Huawei's smaller rival ZTE Corp pleaded guilty previous year to conspiring to evade embargoes by selling US equipment to Iran.

Aaron David Miller, a vice president at the Wilson Center, said the clash of priorities - squeezing Iran on one hand and reaching a trade agreement with China on the other - was likely accidental.

The electronics giant is doing well with smartphone sales outside of the USA, but they, of course, could be even bigger if they were able to tap into this market.

In a statement on Wednesday, Canada's justice ministry said Meng was arrested in Vancouver on December 1.

Ms Meng faces extradition to the United States amid reports she violated American sanctions against Iran.

The head of the United Kingdom intelligence agency MI6 also said the United Kingdom needs to decide if it was "comfortable with Chinese ownership of these [5G] technologies".

"Public opinion in China will likely become more negative in respect to the trade war, and potentially against USA companies", Deutsche Bank analyst Zhiwei Zhang said on Thursday.

The arrest warrant came from the USA and was based on the violation of the trade sanctions against Iran.

ZTE agreed to pay a $1 billion fine and replace its entire board of directors. Markets are already incredibly nervous over slowing economic growth thanks to the inverted U.S. yield curve.

U.S. Senator Ben Sasse praised the move and said that it was "for breaking U.S. sanctions against Iran".

The US has brought a number of legal cases against Chinese technology firms, with accusations such as cyber-security theft and violations of Iran sanctions.