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Trump says he's working with China to save ZTE

14 May 2018
Trump says he's working with China to save ZTE

The export ban was placed on ZTE after the company violated USA sanctions and sold goods and services to Iran and North Korea. 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 Trump on Sunday said he's working with China to help ZTE "get back into business, fast" and prevent further job loss in China.

ZTE has been trying to resolve the blockade that Trump's commerce department imposed in April as punishment for violating the terms of a 2017 sanctions settlement, then lying about it.

ZTE, which has more than 70,000 employees and has supplied networks or equipment to some of the world's biggest telecoms companies, said in early May that it had halted its main operations as a result of the department's "denial order".

As one of the world's largest telecom equipment makers, ZTE relied on U.S. companies for components. "Trump may have recognized that backing off on ZTE clears the path for him to claim at least a partial victory in the US-China trade dispute based on the concessions the Chinese seem prepared to offer".

The U.S. government launched an investigation into ZTE after Reuters reported in 2012 the company had signed contracts to ship hardware and software worth millions of dollars to Iran from some of the best known U.S. technology companies.

"ZTE misled the Department of Commerce", Mr Ross said.

ZTE paid over $100 million each to other USA suppliers in 2017 including chip makers Xilinx Inc and optical component company Acacia Communications and memory chip maker Sandisk, the ZTE official said.

The ban also hurts ZTE's ability to provide services, such as repairs to infrastructure, to customers in other countries and regions in which it operates. "Major operating activities of the company have ceased", ZTE said in a filing Wednesday.

"But be cool, it will all work out!", he said.

In the current climate, Gold said, United States lawmakers appear inclined to impose stricter limits on Chinese investments in U.S. tech firms as a way to stay ahead of China. Experts have since said the company could be circling the drain. "They are not simply going to be able to resume business as usual", he said.

The threat of extinction for ZTE was realistic as it seemed the US was gaining the upper hand in the apparent US/China trade war, but President Trump might prove to be an unlikely hero for ZTE. "You should care more about our national security than Chinese jobs".

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