The White House says Trump and his close aides were not aware the USA planned to place an extradition request for Meng ahead of his dinner with Xi on Saturday.
Huawei is not the first Chinese telecoms equipment firm to face the ire of USA authorities. The Trump administration says they benefit from improper subsidies and market barriers. "The reaction of the USA government would be very strong".
Chinese foreign ministry spokesman Geng Shuang declined to comment when asked on Thursday if Xi had been informed of the arrest when he met Trump.
Speaking at a press conference, Shuang responded to allegations that Meng's arrest had to do with Chinese intelligence services being suspected of involvement in the hacking of the United States hotel group Marriot, saying that he was "not aware" of the situation. Yet US national security advisor John Bolton has publicly said that he did know, and Canadian prime minister Justin Trudeau said he was given "a few days notice".
Likewise, Rod Hunter, an worldwide economic official in President George W. Bush's White House and a partner at law firm Baker McKenzie, said, "I'm skeptical that the Chinese are going to want to say 'uncle.' " US and Chinese officials are "trying to tackle a problem that is going to take years, maybe a decade, to resolve".
"I can assure everyone that we are a country (with) an independent judiciary", Trudeau told a tech conference in Montreal. He noted there is a publication ban on the case and says can not comment further.
Citing a court-ordered publication ban sought by Meng, Trudeau declined to comment further on the case, which according to a United States senator was brought over Huawei's activities in Iran.
Stock markets tumbled on the news, fearing renewed U.S. In China, the company is seen as a symbol of technological prowess and economic achievement.
Japan's Nikkei shed 1.9 percent - closing at its lowest level since October 30 - while Hong Kong's Hang Seng dropped 2.9 percent. Wall Street has been down sharply over the past two days of trading, with the Dow losing more than 1200 points.
"We have made solemn representations to Canada and the United States, demanding that both parties immediately clarify the reasons for the detention, and immediately release the detainee to protect the person's legal rights".
The Crown counsel is expected to argue that Meng poses a flight risk and should be kept in a detention facility, legal experts said.
The arrest took place on the same day that the U.S. and Chinese presidents, Donald Trump and Xi Jinping, had met for a long-awaited summit in Buenos Aires and spoken of easing an intensifying trade row.
Huawei's business in Iran grew after Western companies withdrew to protest a crackdown on demonstrators in 2009.
Adding to worries about USA recession risks, the yield curve remained inverted between two- and five-year zones, with five-year notes yielding 2.763 percent, below 2.778 percent on two-year notes.
How do extraditions from Canada to the United States work?
More recently, the probe has included the company's use of HSBC Holdings Plc to make illegal transactions involving Iran, people familiar with the investigation said.
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'very strong signals' that China is ready for a trade deal
China expressed confidence on Wednesday that it can reach a trade deal with the United States, a sentiment echoed by U.S. He said the Chinese delegation to the G20 summit went to Panama after Buenos Aires and haven't returned to China.
So far, China has tempered its response to Ms Meng's detention.
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. It was also reported earlier this year that Huawei continued to sell network equipment to the Islamic Republic despite punitive financial sanctions.
In April, China appealed to Washington to avoid damaging business confidence following a Wall Street Journal report that USA authorities were allegedly investigating whether Huawei violated sanctions on Iran amid spiralling technology tensions.
Markets had initially brightened this week after US and Chinese leaders agreed a temporary trade truce at a meeting on Saturday.
Huawei's biggest Chinese rival, ZTE Corp., was almost driven out of business this year when Washington barred it from buying US technology over exports to North Korea and Iran.
Huawei issued a statement saying Meng was changing flights in Canada when she was detained "on behalf of the United States of America" to face "unspecified charges" in NY.
The company's Canadian arm said in a statement that Meng's arrest is "in no way" related to Huawei Canada's business or research operations.
The official, speaking on condition of anonymity, acknowledged that the arrest could complicate efforts to reach a broader U.S.
"Huawei complies with all applicable laws and regulations where it operates, including applicable export control and sanction laws and regulations of the UN, US and European Union", it added.
Meng faces extradition to the U.S. over alleged violations of American sanctions against Iran, sending the Dow Jones Industrial Average plunging more than 700 points on Thursday morning.
"China has entertained hopes that they could split us away from the U.S.in the Trump era", he said.
Meng, 46, is deputy chairwoman of Huawei Technologies, one of China's telecom giants and a family business founded in 1987 by her former military-engineer father Ren Zhengfei.
The bail hearing could be just a preliminary session to set out a schedule, lawyers said. "I think this is going to be a major subject of the negotiations that President Trump and President Xi Jinping agreed to in Buenos Aires". "He desperately wants a settlement", said Lam.
"If the Chinese need further convincing, this case would show them beyond doubt Trump's commitment", said Lam.
"The U.S. has been telling its allies not to use Huawei products for security reasons and is likely to continue to put pressure on its allies", said Norihiro Fujito, chief investment strategist at Mitsubishi UFJ Morgan Stanley Securities. "This is a really tough one for Canada".
What about countries with no extradition treaty?
"If I was an American tech executive, I wouldn't travel to China this week".
"That's something we should be watching out for. It's a possibility. China's plays rough", Mr Mulroney said.