Canada may have had little choice but to arrest Huawei Technologies executive Meng Wanzhou as she was transferring from one flight to another at the Vancouver airport, this past Saturday. This country has an extradition treaty with the United States, and the U.S. had asked Canada to make the arrest, so that was that.

But whether we like it or not, Canada is now a key player in a dangerously escalating contest for global dominance between China and the United States. In any such conflict, this country will always stand with its closest ally and trading partner. But we will pay a price.

“Canada must tread very carefully,” said Lynette Ong, a political scientist at University of Toronto, in an interview Thursday.

“The arrest has been portrayed and received by China as a case of hooliganism on the part of the U.S. government,” she said, “and Canada is caught in the middle.”

If worse comes to worst, Prof. Ong warned, American and Canadian businesses and officials in China could be put at risk.

In these early hours, it’s hard to understand why the Americans would move to have one of the most senior officials at China’s telecom giant arrested even as U.S. President Donald Trump and Chinese President Xi Jinping were agreeing over dinner to pause the escalating trade war between the two countries and seek a negotiated solution.

Gordon Houlden, who is director of the China Institute at University of Alberta, suspects the timing might have been coincidental. The opportunity to arrest Ms. Meng – apparently over Huawei’s alleged violation of sanctions imposed by the United States against Iran – arrived at an inconvenient time, but American justice officials were unwilling to lose the chance to make that arrest.

Nonetheless, the chances of the Canadian government allowing Huawei Technologies to become involved in the implementation of 5G technology in this country must now be very slim indeed. The Americans simply won’t tolerate it. Conversely, the Chinese are unlikely to agree to sectoral free-trade negotiations, a Canadian goal.

“The whole thing is a bad news story for us,” Prof. Houlden observed.

And to make that story even worse, the arrest is bound to worsen China-U.S. relations, increasing the risk of an all-out trade war between the two countries that would damage the global economy, which is why stock markets around the world slumped on news of the arrest. As a global trader, Canada’s economy would suffer more than most.

The senior ranks of the U.S. government clearly see China as a strategic threat that must be contained. Whether Ms. Meng was arrested over the Iran sanctions, or as part of a larger American scheme to contain Huawei and other fast-growing Chinese high-technology firms is, in one sense, moot. Canada will be expected to do its part in enforcing that containment. The Chinese, in turn, will react powerfully to any efforts to limit their country’s growth and influence.

The Chinese government is demanding that Ms. Meng be immediately released and any charges against her dismissed.

That is unlikely to happen, says Michael Spratt, a lawyer in Ottawa who has written on Canada’s extradition law. In essence, if the accused is credibly charged with something that would also be a crime in Canada, the courts are likely to grant extradition. For the government then to refuse to permit the extradition “would be pretty much unheard of,” he said.

We are between a rock and a hard place – bound to offend the Chinese, unless in order to placate them we offend the Americans far worse. Canada’s highest foreign-policy priority is to prevent the Trump administration from imposing tariffs on Canadian exports. So placating China is not an option. In any case, Canada is bound by history and self-interest to come to the aid of the Americans when called. And the Americans are clearly calling.

Some observers believe the United States and China are now locked in a cold war. That is probably going too far – the Americans and Chinese have shared economic interests in a way the United States and Russia never did.

But Sino-American relations are at a low ebb, which is bad for Canada and bad for the world. And the irony is that, by arresting Ms. Meng in Vancouver, we helped make things worse.

The Globe and Mail, December 6, 2018