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

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

Trump wrote on Twitter.

Trump, who has taken a hard line on trade and technology issues with Beijing, tweeted on Sunday that he and Chinese leader Xi Jinping "are working together to give massive Chinese phone company, ZTE, a way to get back into business, fast". Trump now says he has instructed the Commerce Department to assist ZTE, most likely by somehow lifting the ban - though it's not clear why, or what, if anything, the US may be getting from China in return, of if the move may be in some way related to the upcoming summit with North Korea.

President Donald Trump's surprise Sunday directive to his Commerce Department to back off an earlier decision and help Chinese telecom giant ZTE Corp. was the opposite of what two of his cabinet secretaries urged in 2016 when they were members of Congress.

ZTE, one of the world's largest telecom equipment makers, suspended its main operations after the US Commerce Department banned American supplies to its business for seven years. According to IDC data, ZTE sources more than 40 percent of its components from the US, creating a multibillion-dollar revenue stream for suppliers like Qualcomm and Intel.

Analysts are watching to see if Trump's conciliatory stance will help ease the tensions over trade between the U.S. and China.

"But be cool, it will all work out!", he said. ZTE and it's subsidiaries are banned from obtaining United States technology for seven years, putting the company's ability to license Android for their smartphone business and technologies and patents for their infrastructure business. "This egregious behaviour can not be ignored".

Several U.S. intelligence agencies have warned against buying ZTE and Huawei phones.

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Prior to announcing his run for president, meanwhile, Trump frequently tweeted about China stealing United States jobs. The U.S. officials had brought a list of demands for the Chinese government that included a halt to all subsidies to advanced manufacturing industries.

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

Last week, the company said their major operating activities had ceased, despite pulling in nearly $17 billion in revenue previous year.

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.

"This is a fascinating development in a highly unusual case that has gone from a sanctions and export control case to a geopolitical one", said Washington lawyer Douglas Jacobson, who represents some of ZTE's suppliers.

Trump's announcement drew sharp criticism from a Democratic lawmaker, who said the move was jeopardizing USA national security. Lumentum Holdings and Acacia Communications Inc. sold key optical equipment.

It looks like ZTE may get a reprieve. Oclaro, which earned 18 percent of its fiscal 2017 revenue from ZTE, fell 17 percent.

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