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President Trump working with China to restore ZTE access to American tech
In a surprising turn of events, President Trump has intervened in a trade dispute that resulted in the shutdown of Chinese electronics company ZTE Corp., saying on Twitter Sunday that he was working with President Xi to get the company “back into business, fast.”
ZTE announced Wednesday that it had ceased major operating activities following a seven-year ban that forbids U.S. companies from supplying ZTE with components. Those components include technology from Qualcomm Inc. and Intel Corp. that the company uses in its smartphones and are not easily replaceable.
The ban, issued by the U.S. Commerce Department in April, was imposed on the basis that ZTE had been found to have sold U.S. technology to banned countries, specifically North Korea and Iran. The company confessed, calling the sale a mistake, paid a fine of $1.19 billion and promised it would not do so again. But the Commerce Department alleged that ZTE did not reprimand senior employees involved in the deal, which ZTE had promised to do as part of a settlement, prompting the ban.
President Trump went on in his tweet to say that the closure had seen “too many jobs in China lost” and that the “Commerce Department has been instructed to get it done!” But the move is likely part of longer-term strategy when it comes to trade relations with China. As Bloomberg reported, the tweet comes as China plans to send Vice Premier Liu He to Washington this week to discuss trade tensions.
Banning ZTE from access to American technology at a time when the Trump administration had finally gotten some trade concessions from the Chinese government couldn’t have been timed more badly, hence President Trump’s apparent intervention.
ZTE isn’t the only Chinese electronics maker that has had issues with the U.S. government. Huawei Technologies Co. Ltd., China’s largest phone maker, also was targeted, including sales bans within the U.S., accusations of spying and an investigation into illegal sales to Iran.
That said, the notable difference between Huawei and ZTE is that Huawei continues to have access to American technology and hence remains free to make and sell its phones, whereas ZTE does not.
Photo: U.S. Embassy Canberra/Wikimedia Commons
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