Meng Wanzhou, chief financial officer of Huawei Technologies Co., leaves the Supreme Court in Vancouver, British Columbia, Canada, on Tuesday, Oct. 1, 2019. Trevor Hagan | Bloomberg | Getty Images

The highly-anticipated extradition trial of Huawei's Chief Financial Officer Meng Wanzhou kicks off on January 20. Canada's relationship with China — and with the United States — could hang in the balance. The case has been dragged into the politics of the U.S.-China trade war. Huawei has come under intense pressure from the U.S. government, which calls it a national security threat. Huawei has repeatedly denied those claims. Meng's extradition battle is one of the many headwinds Huawei faces in 2020.

What's Meng's trial about?

Meng was arrested in Vancouver, Canada in December 2018. The U.S. charged Meng and Huawei with bank and wire fraud in violation of American sanctions on Iran.

The U.S. alleges that Meng lied to major banks including HSBC about Huawei's relationship with a subsidiary in Iran called Skycom, in order to obtain banking services. Huawei denies any wrongdoing. In March 2019, Canada agreed to proceed with the U.S.'s extradition request.

What has happened since?

Since then, Meng's lawyers have looked to end the extradition proceedings, laying out a number of arguments that will now be heard in court. There have been a handful of procedural court hearings regarding the timeline of events. And in December, Meng's legal team won a ruling to obtain more documents relating to her arrest.

What happens next in Meng's trial?

The actual extradition hearing kicks off on January 20 and is scheduled to end on January 24. It may not necessarily last that long. This court appearance will focus on the so-called "double criminality" argument put forward by Meng's defense. Such an argument claims that the crime of which she is accused by the U.S. also needs to be a crime in Canada. Meng is accused of violating U.S. sanctions on Iran. Since Canada does not have sanctions on financial services in Iran, her legal team argues she can't be extradited for alleged bank and wire fraud and conspiracy to commit bank and wire fraud. The double criminality is perhaps the most important argument in the case. "The biggest legal issue is whether the conditions for dual criminality are fulfilled ... this is a requirement for the extradition to go forward and is the most critical issue," Yves Tiberghien, a professor at the Department of Political Science at the University of British Columbia, told CNBC.

If the judge sides with Meng, the Huawei CFO could be released, or the prosecutors could appeal. If the double criminality argument does not prevail, then the hearings will proceed to a second phase in June. A decision may not come immediately, but could instead follow weeks later. That second hearing would focus on due process regarding Meng's arrest. Her defense has argued that there was an abuse of process during her arrest by the Canada Border Services Agency (CBSA). In October, it was revealed that border officers took the passwords to Meng's electronic devices and handed them over to the police. Lawyers for the Canadian government acting on behalf of the United States called this an "error." Again, the extradition proceedings could be stopped on that point if the judges side with Meng. And again, the prosecution could appeal. If the judges decide against Meng, the case will move on the the third phase scheduled for September. That will focus on the sufficiency of the U.S. evidence against the Huawei executive.

Can Canadian politicians intervene?

Meng's extradition case has already become highly politicized. Just days after her arrest in 2018, President Donald Trump said he could intervene in Meng's case if it helped secured a trade deal with China. Last year, China arrested two Canadians — Michael Kovrig and Michael Spavor — accusing them of espionage. Those arrests prompted accusations that China was retaliating for Meng's arrest. The Chinese government has repeatedly pressured Canada to release Meng. Canada Minister of Justice David Lametti has the power to step in and make a decision on the case before the hearings are done. However, experts say such a move is unlikely. "This provision has been rarely if ever used. Under common law, jurisprudence does matter. So, the fact that this provision was not used makes non-intervention a sort of political norm," Tiberghien said. The professor also pointed to a fraud case related to SNC-Lavalin, a Canadian engineering firm. Prime Minister Justin Trudeau tried to get then-justice minister Jody Wilson-Raybould to intervene. She refused and was subsequently removed from the federal Liberal caucus. Tiberghien said there would be "political cost" for ministerial intervention in the Meng case. "The Chinese side knows about the provision in the law and has been cajoling or pushing Canada to use it," said Tiberghien. "Under current conditions and the present moment, it is very unlikely that the government will use this provision because of the high political cost."