Trump scrambles to save Chinese phone company hurt by his export ban

Gladys Abbott
May 14, 2018

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

The Commerce Department ban on US suppliers exporting goods to the Chinese network equipment and handset maker was discussed when a delegation led by US Treasury Secretary Steven Mnuchin met with Chinese officials in Beijing last week. "But calm down, everything will work out!", - he wrote in Twitter. The US Commerce Department did not immediately respond to multiple requests for comment Sunday.

The trade troubles threaten a technology sector that is increasingly intertwined with major players in the United States and China.

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.

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In March 2017 ZTE admitted to violating U.S. sanctions by illegally shipping American technology to Iran and Korea and was fined $1.1bn (£800m). The company warned in April, when the ban was first implemented, that it would "severely impact the survival and development" of ZTE. The company said it is working to have the ban modified or reversed.

Beijing has made resolving the situation with ZTE, which employs about 80,000 people, one of its demands for striking a broader trade agreement with with US. FBI Director Christopher Wray said intelligence officials are "deeply concerned about the risks of allowing any company or entity that is beholden to foreign governments that don't share our values to gain positions of power inside our telecommunications networks". During the campaign, Trump blasted China for what he alleged was a pattern of cheating through currency devaluation and other measures to steal American jobs and hurt US workers.

Trump's offer to help comes as Chinese and United States officials prepare for talks in Washington with China's top trade official Liu He to resolve an escalating trade dispute between the world's two largest economies.

His advisers have launched official or unofficial trade discussions with numerous countries, and these talks are wrapped in uncertainty because it is unclear whether Trump will follow through on promises to impose tariffs, even if they might raise prices for US consumers.

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