"But be cool, it will all work out!"
USA officials are preparing for talks in Washington with China's top trade official Liu He to resolve an escalating trade dispute.
The Trump administration has taken a hard line on what it says are unfair trade practices by the Chinese government, proposing about $50 billion worth of tariffs on products and technology that advance Beijing's industrial development goals. The export ban was placed on ZTE after the company violated US sanctions and sold goods and services to Iran and North Korea.
ZTE pleaded guilty a year ago to conspiring to violate us sanctions by illegally shipping USA goods and technology to Iran and entered into an agreement with the USA government.
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The US president also earlier this year blocked a deal that would have allowed a Singapore-based firm to acquire US chipmaker Qualcomm, claiming it would enable Huawei to set the pace the global rollout of 5G technology.
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".
While it's not surprising that Trump would announce his support for such a move on Twitter, the fact that he's so forcefully supporting ZTE in the first place raises eyebrows for a number of reasons. "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". US companies that export to China have seen their goods held up at China's ports amid tougher inspections.
ZTE depended on American chips and other components, and is unable to continue operating without key supplies.
The Commerce Department ban on U.S. suppliers exporting goods to the Chinese network equipment and handset maker was discussed when a delegation led by U.S. Treasury Secretary Steven Mnuchin met with Chinese officials in Beijing last week. According to IDC data, ZTE sources more than 40 percent of its components from the USA, creating a multibillion-dollar revenue stream for suppliers like Qualcomm and Intel.
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Recently, though, the Trump administration also has sought to limit the encroachment of Chinese telecommunications firms in the United States.
The company, which relies heavily on imports of components made in the United States and has about 75,000 workers, appealed the order to the Commerce Department, arguing that the ban could force it out of business.
Other experts said Trump's policy reversal was unprecedented. Too many jobs in China lost.
Whether or not ZTE actually gets another chance is another matter.
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