Published: Mon, May 14, 2018
Economy | By

US President Donald Trump says working on to solve ZTE issue

US President Donald Trump says working on to solve ZTE issue

Trump did not announce the precise reason for his reversal on ZTE sanctions, saying only "Too many jobs in China lost", in the Twitter message that posted shortly after arriving at Trump National Golf Course in Virginia on Sunday.

It's not exactly clear how Trump plans to help ZTE or what he's instructed the Commerce Department to do.

Now, Trump says he's working with President Xi Jinping of China to get the company back on its feet.

Last month, the Trump administration blocked American firms from selling parts or providing services to ZTE until 2025.

The announcement seemed to directly contradict the policy of the Department of Commerce, which in April imposed a seven-year ban on sales of components to ZTE in connection with the company's violation of USA sanctions on Iran.

But U.S. officials said this year that ZTE didn't discipline all the employees involved in the violations.

As a presidential candidate, Donald Trump said in 2015: "China, taking our jobs, taking our money".

Trump expects Commerce Secretary Wilbur Ross "to exercise his independent judgment, consistent with applicable laws and regulations, to resolve the regulatory action involving ZTE based on its facts", Walters said. Liu He, a top economic adviser to Xi, is due to visit Washington soon to follow up on discussions.

As one of the world's largest telecom equipment makers, ZTE relied on U.S. companies for components.

In response to United States actions, China has imposed duties on 128 products from the USA.

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

Certain aspects of the ZTE business need to remain reliant on the United States, but it has been reported that 80% of the business is.

FILE PHOTO: The logo of ZTE Corp is seen on its building in Beijing, China April 19, 2018.

That cut off access to the United States technology it needs to build most of its products, from Qualcomm's semiconductors to optical chips from Lumentum Holdings.

Given that USA sanctions were imposed on ZTE due to threats to national security and its violation of trade sanctions with Iran and North Korea, Trump's desire to give the company another chance in the truly unexpected.

There is a risk of letting any company "beholden to foreign governments" inside the country's telecommunications infrastructure, he said.

Without specifying companies or countries, Federal Communications Commission Chairman Ajit Pai recently said "hidden "backdoors" to our networks in routers, switches, and other network equipment can allow hostile foreign powers to inject viruses and other malware, steal Americans' private data, spy on US businesses, and more".

Despite the offer to help ZTE, trade tensions between the US and China remain sky high.

While the USA and China have threatened each other with trade tariffs, Trump has insisted that relations between Washington and Beijing have never been better and he has been working closely with Xi in efforts to persuade North Korea to abandon its nuclear program.

"They're using our country as a piggy bank to rebuild China, and many other countries are doing the same thing", he said during a September 2016 debate. The US Commerce Department did not immediately respond to multiple requests for comment Sunday.

"This is entirely unprecedented", said Doug Jacobson, an export controls and sanctions attorney for Jacobson Burton Kelley who represents suppliers that do business with ZTE.

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