Published: Mon, May 14, 2018
Finance | By Cynthia Curry

Trump orders U-turn to get China's ZTE back into business

Trump orders U-turn to get China's ZTE back into business

U.S. President Donald Trump pledged on Sunday to help ZTE Corp "get back into business, fast" after a U.S. ban crippled the Chinese technology company, offering a job-saving concession to Beijing ahead of high-stakes trade talks this week.

President Donald Trump has instructed his Commerce Department to help get a Chinese telecommunications company get "back into business" after the United States government cut off access to its American suppliers.

President Donald Trump said Sunday he has instructed his Commerce Department to help get a Chinese telecommunications company "back into business" after the U.S. government cut off access to its American suppliers. It was just last month that Commerce Secretary Wilbur Ross called ZTE's illegally sending equipment to North Korea and Iran "egregious behavior".

The US's only major telecom equipment maker, Lucent Technologies, was acquired by France's Alcatel SA in 2006, with the combined company later absorbed into Finland's Nokia Oyj. But now, barred from using US microchips, software and other components, ZTE has been facing the prospect of being unable to manufacture its telecommunications equipment and smartphones.

Trump's willingness to aid ZTE in preserving Chinese jobs comes despite his condemnations of China on the campaign trail.

Then, of course, the President is involved in an aggressive trade dispute with China, which, on the USA side, included tariffs on about $60 billion of Chinese goods, the bulk of which were focused on the high-tech industry.

"But be cool, it will all work out!", he said.

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ZTE's fibre-optic networks depend on USA components and its cheap smartphones sold en masse overseas are powered by United States chips and the Android operating system. "This egregious behaviour can not be ignored". "Commerce department has been instructed to get it done".

The U.S. ban has additionally been interpreted as a possible salvo in the burgeoning trade war between the Trump administration and China, and through that lens, the action may have given the U.S. leverage in trade negotiations. "Major operating activities of the company have ceased", ZTE said in a filing Wednesday. The block on ZTE was a heavy blow for the company but also hurt the USA companies it buys from.

It also marks the second time in the last month the Trump administration has moved to roll back sanctions against a foreign company that had almost been pushed into insolvency, raising questions over how thoroughly the White House is co-ordinating sanctions policy with federal agencies.

Trump's announcement drew sharp criticism from a Democratic lawmaker, who said the move was jeopardizing USA national security.

"You should care more about our national security than Chinese jobs", he wrote on Twitter.

FILE PHOTO: A ZTE smart phone is pictured in this illustration taken April 17, 2018.

It looks like ZTE may get a reprieve.

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