If the American (or, I'd guess, Canadian) foreign policy arm had its way, this arrest wouldn't have happened. Unfortunately, rule of law. An independent prosecutor issued warrants which were confirmed by a court and executed by police.
The concept of independent agencies doesn't exist outside a small number of countries. It can be difficult for an elite in Beijing to believe the American president has no power to halt the proceedings against Huawei's CFO. This is, at its core, the mis-understanding. Not Cold War proxy war dynamics.
There is no misunderstanding. Everyone involved knows exactly what is going on. It's international politics. The only question is how this is resolved. Will it escalate or will the US and china achieve a compromise?
When significant powers want to send each other messages without escalating to full out war, they use smaller satellite states to deliver their messages. This is what happened during the cold war between the Soviets and the US. It's what's happening between the US and China.
If china or the US or russia or any major power wanted to send a message to small countries, they'd do so directly. Like we do with canada or China does with north korea or russia does with the smaller ex-soviet nations.