Push to save ZTE part of larger trade deal'

Sheila Mcguire
May 17, 2018

More recently, he overlooked genuine national security concerns with his sudden announcement that he's reconsidering newly imposed sanctions on ZTE, the partially state-owned Chinese telecommunications company guilty of a systematic, yearslong effort to sell its services and equipment to Iran, using USA -made inputs, and to North Korea.

The Trump administration has yet to reveal any details of trade talks expected this week between a delegation led by Chinese Vice-Premier Liu He, the top economic adviser to President Xi Jinping, and senior Trump administration officials.

In tweets yesterday, Mr. Trump said "trade negotiations are continuing with China" and to "stay tuned!"

Trump's public statements have muddled that message.

ZTE, which employs 80,000 people, said last week its major operations had "ceased" after being banned for seven years from buying crucial American technology, raising the possibility of its collapse.

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"Nothing has happened with ZTE except as it pertains to the larger trade deal", Trump tweeted Wednesday, singling out The Washington Post and CNN for their coverage.

ZTE was fined $1.2 billion in March 2017 but last month it was hit with a steeper sanction, prohibiting United States firms from supplying it with needed parts after the Commerce Department found the company had lied multiple times and failed to take actions against employees responsible for sanctions violations on Iran and North Korea.

Trump's tweet on Sunday was quickly met with bipartisan criticism.

The moves against waste imports have thrown the American recycling industry into a tailspin as China was one of the most important destinations for USA trash.

GOP Sen. Marco Rubio attacked Trump's move after reports that the ZTE decision would come in exchange for China's lifting tariffs on some American agricultural products. "Why are we helping them achieve this by making a bad deal on ZTE?" Sen.

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"Clearly President Xi personally intervened for #ZTE but replacing sanctions with fine of $300/$400 million is not a good deal", Rubio said Tuesday on Twitter. Liu will also meet with Sen.

And Rep. Adam Schiff, a California Democrat, tweeted that Trump "should care more about our national security than Chinese jobs".

The president's about-face came in the form of an improvised tweet just a month after the Commerce Department barred USA firms from selling components to ZTE for seven years, tantamount to a death sentence for this pillar of Chinese state capitalism.

Democratic Senator Ron Wyden warned against giving sanctions relief to ZTE. "We increased the inspection ratio of American pork", China's customs bureau said. "What's important is whether a giant Chinese state-owned enterprise gets away with breaking American law. It's really divorced from the trade story", Kudlow said. "Our country has been losing hundreds of billions of dollars a year with China".

But Trump's tweets - even those on Wednesday - nearly always refer to ZTE in the context of trade. China reciprocated by relaxing its previous opposition to US -based Qualcomm's proposed acquisition of semiconductor maker NXP, and by offering to lift its threat of tariffs on USA agricultural goods (which were provoked by Trump's tariff threats against China to begin with). "China has seen our demands".

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"We also have to understand that China is an adversary, and I think long-term they're actually our biggest adversary, whether that's economic or military", said Kinzinger.

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