Trump pledges to help Chinese phone maker that was hurt by sanctions

Trump pledges to help Chinese phone maker that was hurt by sanctions

"President Xi of China, and I, are working together to give massive Chinese phone company, ZTE, a way to get back into business, fast", the president first wrote about the company on Twitter. Too many jobs in China lost.

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.

President Donald Trump on Sunday indicated he would intervene on behalf of a Chinese telecommunications company that was previously accused of lying to federal regulators and sanctioned a year ago by the Commerce Department for selling equipment to North Korea and Iran.

The department last month banned shipments of USA technology to ZTE for seven years, saying the company had failed to reprimand employees who violated US trade controls on Iran and North Korea.

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

For critics worrying about a trade war between Washington and Beijing, the president added a bit of advice - "But be cool, it will all work out!"

ZTE's fiber-optic networks depend on U.S. components and its cheap smartphones sold en masse overseas are powered by USA chips and the Android operating system.

Commerce Secretary Wilbur Ross last month accused ZTE of misleading the Department of Commerce and warned, "This egregious behavior can not be ignored".

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At the Beijing talks, the Trump administration handed China a list of hard-line demands that trade experts said could make it even more hard to resolve the trade disputes.

"Imagine how the United States would feel if China had the power to crush one of our major corporations and make it go out of business", Reade said.

One 2012 congressional report about ZTE and Huawei, another huge Chinese tech company, said the companies "cannot be trusted to be free of foreign state influence and thus pose a security threat to the United States and to our systems". "China may now have strengthened its desire to get out from a under a scenario where the United States can do that again".

Another Chinese manufacturer, Huawei, is also under fire in the US.

Other experts said Trump's policy reversal was unprecedented.

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ZTE suppliers including Acacia, Oclaro, Lumentum Holdings, Finisar, Inphi and Fabrinet, all fell sharply after the ban was announced.

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