Trump 'working' with Xi Jinping to save jobs at Chinese company hit by US ban
China Trump 'working' with Xi Jinping to save jobs at Chinese company hit by US ban
- ZTE lost access to US suppliers over Iran and North Korea sanctions
- Reversal is concession to Beijing ahead of high-profile trade talks
In a surprise policy reversal, Donald Trump said on Sunday he had instructed his commerce department to help get a Chinese telecommunications company âback into businessâ, after his government cut off access to its US suppliers.US threatens European companies with sanctions after Iran deal pullout Read more
The US commerce department last month blocked ZTE, a major supplier of telecoms networks and smartphones based in Shenzhen in southern China, from importing American components for seven years. The US accused ZTE of misleading US regulators after it settled charges of violating sanctions against North Korea and Iran.
The US discovered that ZTE, which had paid a $1.2bn fine, had failed to discipline employees involved and paid them bonuses instead.
During recent trade meetings in Beijing, Chinese officials said they raised objections over ZTEâs punishment with the US delegation, which they said agreed to report them to Trump.
Trumpâs move on Sunday to reverse the ban was a major concession to Beijing ahead of high-stakes trade talks in Washington this week. US officials are preparing to meet with Chinaâs top trade official, Liu He, to resolve an escalating dispute between the worldâs two largest economies.
One Democratic lawmaker said Trumpâs move jeopardised US national security.
âOur intelligence agencies have warned that ZTE technology and phones pose a major cyber security threat,â Adam Schiff, senior Democrat on the House intelligence committee, wrote on Twitter. âYou should care more about our national security than Chinese jobs.â
You should care more about our national security than Chinese jobsAdam Schiff
Claire Reade, a Washington-based trade lawyer and former assistant US trade representative for China affairs, told Reuters the ZTE ban was a shocking blow to China and may have caused more alarm in Beijing than Trumpâs recent threats to impose tariffs on $50bn in Chinese goods.
âImagine how the United States would feel if China had the power to crush one of our major corporations and make it go out of business,â Reade said. âChina may now have strengthened its desire to get out from a under a scenario where the United States can do that again.â
Even though ZTE was probably âfoolishâ in not understanding the consequences of violating a commerce department monitoring agreement, Reade said, the episode makes it less likely that China will make concessions on US demands that it stop subsidizing efforts to develop its own advanced technology.
Other experts said Trumpâs policy reversal was unprecedented. âThis is a fascinating development in a highly unusual case that has gone from a sanctions and export control case to a geopolitical one,â said Washington lawyer Douglas Jacobson, who represents some of ZTEâs US suppliers.
Trumpâs reversal will likely have a significant impact on companies such as Qualcomm and Intel. American firms are estimated to provide 25% to 30% of the components used in ZTE equipment, which includes smartphones and gear to build telecommunications networks.
ZTE has more than 70,000 employees and has supplied networks or equipment to some of the worldâs biggest telecoms companies. By cutting off access to US suppliers of essential components such as microchips, the ban threatened ZTEâs existence, the company has said. It asked the US commerce department to suspend the ban. In early May it said it had halted its main operations.
Trump, who has taken a hard line on trade and technology issues with Beijing and campaigned relentlessly on protecting jobs in the US, tweeted on Sunday that he and Chinese leader Xi Jinping were âworking together to give massive Chinese phone company, ZTE, a way to get back into business, fastâ.
âToo many jobs in China lost,â the president wrote. âCommerce department has been instructed to get it d one!â
The commerce department did not immediately respond to requests for comment.
Trump later tweeted: âChina and the United States are working well together on trade, but past negotiations have been so one sided in favor of China, for so many years, that it is hard for them to make a deal that benefits both countries. But be cool, it will all work out!âTopics
- Asia Pacific
- Trump administration
- Donald Trump
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