ANALYST'S TAKE: "We are closely watching the developments in Asia after reports that Canada has arrested the Huawei CFO facing USA extradition for allegedly violating Iran sanctions".

Benchmark U.S. crude slid 2.9 percent to $51.38 a barrel in NY.

USA stock markets recovered most of their losses after plunging on reports that a Chinese technology executive was arrested in Canada.

It's particularly worth noting that Meng was arrested on the same day that U.S. President Donald Trump and his Chinese counterpart Xi Jinping held a significant bilateral meeting in Buenos Aires, Argentina.

Its devices have come under scrutiny from United States authorities over spying fears, and the arrest of its CFO has the potential to further inflame tensions between the two countries amid a mounting trade war. Hong Kong's Hang Seng Index dropped 2.47 percent, while the Shanghai Composite Index fell 1.68 percent.

In a statement, Huawei says Meng is being sought for extradition to face unspecified charges in the Eastern District of NY.

"Without any solid evidence, the Canadian and U.S. governments trampled on worldwide law by basically "kidnapping" Chinese citizen Meng", an official with the Chinese Ministry of Commerce said in a Global Times op-ed. A bail hearing is being planned for Friday to determine what will happen next.

A month later, Washington and Beijing reached a deal that would strike ZTE from the sanctions list - just days after China reportedly offered to ramp up purchases of American goods to reduce the trade imbalance with the US.

However, the company has been plagued with problems in the U.S. where lawmakers and intelligence officials have labeled the Chinese firm a threat to national security because of its close connections with Beijing, arguing that the company's technology could be used to spy on Americans. Under Trump and his predecessor, Barack Obama, Washington has pressured European countries and other allies to limit use of its technology.

He added that the U.S. has had "enormous concerns for years about the [.] practice of Chinese firms to use stolen American intellectual property, to engage in forced technology transfers, and to be used as arms of the Chinese government's objectives in terms of information technology in particular".

Trump's tariff hikes this year on Chinese imports stemmed from complaints Beijing steals or pressures foreign companies to hand over technology. But American officials also worry more broadly that Chinese plans for state-led creation of Chinese champions in robotics, artificial intelligence and other fields might erode USA industrial leadership.

Richard Kurland, a Vancouver-based immigration lawyer, said there was little chance Meng would be released from detention.

US telecommunications firms fear that partnering with Huawei by allowing it to sell their smartphones would anger the federal government and jeopardize future contracts.

The "message is clear - the USA is closing the borders to many Chinese technology companies", said Neil Campling, co-head Global Thematic Group at Mirabaud Securities.

For the same reason, Australia's government blocked China's telecom giant Huawei from its 5G mobile network last summer.

On Wednesday, BT announced it was removing Huawei's telecommunications equipment from its 4G cellular network, following a warning from the head of MI6 foreign intelligence service that singled out the Chinese company as a potential security risk. It said Huawei still is a supplier of other equipment and a "valued innovation partner". But the Wall Street Journal reported in April that USA authorities were investigating whether Huawei violated sanctions on Iran, leading the Chinese government to appeal to Washington to avoid any steps that might have damaged business confidence. Washington has previously raised concerns about the Chinese conglomerate because of its links to Beijing's government.

The Wall Street Journal reported earlier this year that USA authorities were investigating whether Huawei violated sanctions on Iran. But ZTE (ZTCOF), a Chinese tech firm that was temporarily crippled by a U.S. export ban earlier this year, slumped almost 9%. Huawei also recently surpassed Apple as the second biggest maker of cellphones after South Korea's Samsung Electronics Co.

Meng Wanzhou, who is one of the vice chairs on the Chinese technology company's board and the daughter of company founder Ren Zhengfei, was arrested on December 1 and a court hearing has been set for Friday, a Canadian Justice Department spokesman said.

The company also said it was "not aware of any wrongdoing" by Meng.

The U.S. Justice Department didn't immediately respond to a request seeking comment.