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The dispute between Canada and China continues to escalate after Bejing detained two Canadians this week and warned more “retaliation” will be in store if Huawei’s CFO is not released.

Prime Minister Justin Trudeau said Canada was just following “the rule of law” when the Chinese telecom giant’s executive Meng Wanzhou was arrested at the Vancouver International Airport on Dec. 1 at the U.S. government’s request, which accused the CFO of violating American sanctions against Iran.

But China hit back and flexed its muscles — and not at the U.S., but at Canada.

WATCH: Who is Michael Spavor, the second Canadian to go missing in China?

1:10 Who is Michael Spavor, the second Canadian to go missing in China? Who is Michael Spavor, the second Canadian to go missing in China?

Meng’s arrest triggered outrage among Chinese officials, who were quick to condemn Canada and threatened “grave consequences” if she was not released.

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And they followed through.

WATCH: Who is former Canadian diplomat Michael Kovrig?

1:08 Who is former Canadian diplomat Michael Kovrig? Who is former Canadian diplomat Michael Kovrig?

Calgary-born entrepreneur Michael Spavor and former Canadian diplomat Michael Kovrig were taken into Chinese custody on Monday on suspicion of “endangering national security.”

Peter Navarro, the White House trade policy advisor, appeared on Fox Business Network Thursday morning and said the Huawei incident was the reason for the Canadians’ arrests.

When asked by Fox Business host Maria Bartiromo whether the incidents were related, Navarro replied: “Of course, it is. That’s the Chinese playbook.”

WATCH: ‘China will take revenge’ if Canada doesn’t free Huawei CFO Meng Wanzhou, Global Times editor says

1:00 ‘China will take revenge’ if Canada doesn’t free Huawei CFO Meng Wanzhou: Global Times editor ‘China will take revenge’ if Canada doesn’t free Huawei CFO Meng Wanzhou: Global Times editor

Nelson Wiseman, a political science professor at the University of Toronto, agreed, saying the fact China is going after Canada and not the U.S. (who requested Meng’s arrest), shows this is a political move.

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“The Chinese could have easily grabbed an American businessman or American diplomat, they could have done both. But they haven’t,” Wiseman said.

And the situation may get worse.

On Wednesday, the editor-in-chief of the Communist Party-run tabloid the Global Times, uploaded a video in which he warned that “if Canada extradites Meng to the U.S., China’s revenge will be far worse than detaining a Canadian.”

WATCH: Canadians’ detainment demonstrates Trudeau’s ‘naïve approach’ to relations with China, Scheer says

1:32 Canadians’ detainment demonstrate’s Trudeau’s ‘naïve approach’ to relations with China: Scheer Canadians’ detainment demonstrate’s Trudeau’s ‘naïve approach’ to relations with China: Scheer

Is China bullying Canada?

Brock University professor Charles Burton, a former Canadian diplomat in China, said he believes Beijing authorized the Canadians’ detention to send Canada a warning in the Meng case.

He said the “timing” of the arrest seems to be a response by the Chinese government’s statements of “grave consequences.” This is because Meng is not simply a Huawei executive, but she is referred to as China’s “tech princess” and is also a senior member of China’s communist party, along with her father.

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Meng is someone who is very connected, Burton said, adding that China will exert “extreme pressure” to make sure she is freed.

One of Canada’s former ambassadors to China also has little doubt the detainment of Spavor and Kovrig is a response to the Huawei case.

“I can tell you that based on my 13 years of experience in China, there are no coincidences. … The Chinese government wanted to send us a message,” Guy Saint-Jacques said.

WATCH: Some American lawmakers are raising concerns about the price Canada is paying for the arrest of Huawei CFO Meng Wanzhou. It’s the U.S. that wants Meng, not Canada. Jackson Proskow reports from Washington.

2:18 How U.S. is responding to spat between Canada and China How U.S. is responding to spat between Canada and China

Why Canada and not the U.S?

China seems to be taking a softer tone with the U.S. On Sunday, China talked with the U.S. ambassador and lodged “a strong protest” over the case, according to the South China Morning Post.

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China also requested the U.S. withdraw an arrest warrant for Meng, but it fell short of threatening “grave consequences” as it did to Canada

Wiseman said China’s treatment to the U.S. versus Canada boils down to economics.

COMMENTARY: Canada takes the heat for Huawei arrest

“The focus has been on Canada and not the U.S. because China wants to improve its relations with the U.S., that is what counts for China,” he said.

Last week, China and the U.S., the world’s two biggest economies, agreed to a 90-day truce in their trade war. Meng’s arrest raised concerns that China-U.S. trade talks could be derailed, but on Tuesday China said the talks were still happening.

“Chinese-Canadian trade for the Chinese is loose change compared to what they export to the United States. We’re so much smaller, it does not matter,” Nelson said, adding that it is the Americans who imposed tariffs on China, not Canada. So China’s vital economic interests are at stake.

WATCH: Morneau calls detained Canadians in China a “challenge,” but sticks to trade relations rhetoric

1:53 Morneau calls detained Canadians in China a “challenge,” but sticks to trade relations rhetoric Morneau calls detained Canadians in China a “challenge,” but sticks to trade relations rhetoric

To put that in perspective:

In 2016, China exported more than $48 billion to Canada, according to the World Integrated Trade Solution. The same year, China imported US$15 billion from Canada. (Dollar figures are U.S.)

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In 2016, China exported more than $481 billion to the U.S. The same year, China imported more than $115 billion from the U.S.

Saint-Jacques said because of China’s economic reliance on the U.S., Canada has become a scapegoat.

“Of course they cannot kick them [the U.S.], so they turned around and kicked us,” he said. Tweet This

China has used this tactic with Canada before

The Chinese government has detained Canadians before, and Stephanie Carvin, national security expert and Carleton University professor, believes it was another political move.

“It’s widely believed that the Garrett family, who was detained a few years ago, was in response to an individual residing in British Columbia who was extradited to the United States for espionage activity,” Carvin said.

WATCH: Canadians once detained in China speak about their horrifying ordeal

8:39 Canadians once detained in China speak about their horrifying ordeal Canadians once detained in China speak about their horrifying ordeal

In 2014, B.C. couple, Kevin and Julia Garratt, who ran a coffee shop in China, were arrested by Chinese authorities for espionage-related charges.

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Julia was released in 2015, while Kevin was held for two years. The couple was never convicted and told media they were “dumbfounded” by charges.

Carvin said China may believe arresting Kovrig will help their case because of a misconception of the justice system.

Huawei chief financial officer Meng Wanzhou, right, arrives at a parole office with a member of her private security detail in Vancouver, on Wednesday December 12, 2018. THE CANADIAN PRESS/Darryl Dyck. THE CANADIAN PRESS/Darryl Dyck

“China doesn’t have free and fair courts. They don’t think we have them, either,” she explained. “So I think they think that they’re gaining some kind of leverage.”

Will Canada bow under China’s pressure?

Ottawa has repeatedly stated the arrest is not political and only complies with international laws on extradition — a request from U.S. law enforcement.

Roland Paris, a former foreign policy adviser to Canadian Prime Minister Justin Trudeau, took to Twitter this weekend and said Beijing’s efforts to force Ottawa to cave may not work because of this.

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WATCH: Should Canadians living or travelling in China be concerned?

1:07 Should Canadians living or travelling in China be concerned? Should Canadians living or travelling in China be concerned?

“Perhaps because the Chinese state controls its judicial system, Beijing sometimes has difficulty understanding or believing that courts can be independent in a rule-of-law country,” he wrote in a tweet. “There’s no point in pressuring the Canadian government. Judges will decide.”

Perhaps because the Chinese state controls its judicial system, Beijing sometimes has difficulty understanding or believing that courts can be independent in a rule-of-law country. There’s no point in pressuring the Canadian government. Judges will decide. https://t.co/rJh4lgPCbe — Roland Paris (@rolandparis) December 8, 2018

WATCH: China is one of Canada’s major trading partners. And the growing power of China’s influence is clear in the current tensions over the arrest of Huawei CFO Meng Wanzhou. But as Eric Sorensen reports, in an escalating crisis, it’s clear Canada has far more to lose.

2:03 How will China’s retaliations affect relations with Canada? How will China’s retaliations affect relations with Canada?

But in the midst of the spat, U.S. President Donald Trump on Tuesday said he would intervene in the Justice Department’s case against a Chinese telecommunications executive if it would help secure a trade deal with Beijing.

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“Whatever’s good for this country, I would do,” Trump said. “If I think it’s good for what will be certainly the largest trade deal ever made — which is a very important thing — what’s good for national security — I would certainly intervene if I thought it was necessary.”

Wiseman said Trump’s comments may give Meng’s lawyers some leverage if the case is brought to court soon.

“There could be an opening for [her] lawyers to go back to court. They will introduce Trump’s comments and claim, ‘This demonstrates that the American action is politically driven rather than legally driven.’ Her legal counsel could maybe convince a judge to let Meng go.”

— With files from Global News’ Rebecca Joseph and the Canadian Press