Canadian Prime Minister Justin Trudeau knew in advance that Meng Wanzhou, chief financial officer of China's Huawei Technologies, would be arrested in Vancouver during a transit on Saturday.
But he said there was no political involvement in the case, while sources indicated the investigation into Huawei's involvement in Iran had predated the Trump administration and the U.S.-China trade war.
Canadian Justice Department officials decided to arrest Meng when she was transiting through Vancouver on Dec. 1 at the request of U.S. law enforcement authorities, Trudeau said, confirming a statement from the Chinese side earlier this week.
Washington is investigating her in connection with alleged violations of U.S. trade sanctions against Iran, and White House economic adviser Larry Kudlow said on Friday the case was "simply an issue of national security."
"The appropriate authorities took the decisions in this case," Trudeau told reporters in Montreal. "We were advised by them with a few days' notice that this was in the works but, of course, there was no engagement or involvement on the political level in this decision because we respect the independence of our judicial processes."
Beijing has accused Canada and the United States of arresting Meng, the daughter of Huawei founder Ren Zhengfei, without giving a reason.
"Detaining a person without providing an explanation has undoubtedly violated her human rights," Chinese foreign ministry spokesman Geng Shuang told a news conference, adding that Beijing has lodged "stern representations" with both the U.S. and Canada, calling on them to free Meng immediately.
But Reuters cited one source as saying the arrest had been discussed with Huawei's board of directors in advance.
Ms. Meng's arrest came as U.S. President Donald Trump and Chinese President Xi Jinping agreed to a temporary trade war truce at the G20 leaders' summit in Argentina, which Trudeau also attended. U.S. national security adviser John Bolton on Thursday said he also knew of the arrest plans in advance.
Fang Enge, a senior U.S. political risk management consultant with connections to Congress, said U.S. investigators had been concerned that Huawei could be violating sanctions against Iran since before Trump took office.
He said Meng is now highly likely to be extradited to the United States.
"It's not 100 percent certain, but the likelihood is very high, because there is an extradition agreement in place between the two countries," Fang said. "If the U.S. provides sufficient evidence, then Canada basically has to cooperate."
"In theory, the judge's decision is independent and will not be influenced by politics, and will not take into account Sino-U.S. relations, or how the current trade negotiations are going," he added.
Meng is scheduled to appear for a bail hearing in a Vancouver courtroom on Friday and a publication ban on the details of the U.S. allegations is in effect at the request of the Huawei executive, according to officials.
Her arrest comes as Canada faces intense pressure from Washington to block the Chinese telecom company from supplying equipment for next-generation 5G mobile networks.
The United States and Australia have already barred Huawei equipment from the next generation of 5G networks, while New Zealand has issued a ban on Huawei equipment with at least one supplier, and the U.K.'s BT has announced it will remove Huawei equipment from its network following queries from the head of intelligence service MI6.
Huawei, which analysts say is privately owned but nonetheless behaves like a strategic partner in China's technological development, said in an open letter that it won't change its partnership with global suppliers, regardless of how "unreasonable" the U.S. becomes.
"It is unreasonable for the U.S. government to use these sorts of approaches to exert pressure on a business entity," the company said in an open letter cited in the U.S. edition of the state-controlled China Daily newspaper.
"They are against the spirit of free economy and fair competition. Nevertheless, regardless of how unreasonable their approach becomes, the partnerships we have with our global suppliers will stay unchanged," the letter said.
Reported by Wen Yuqing for RFA's Cantonese Service, and by Qiao Long for the Mandarin Service. Translated and edited by Luisetta Mudie.