Tuesday, 14 August, 2018

Trump may ease sanctions on China's ZTE

Denis O’Brien-owned Digicel said much of its ZTE-related infrastructure roll-out was already complete Denis O’Brien-owned Digicel said much of its ZTE-related infrastructure roll-out was already complete
Scott Davis | 14 May, 2018, 06:03

The department banned shipments of U.S. technology to ZTE for seven years, saying the company had failed to reprimand employees who violated United States trade controls on Iran and North Korea.

ZTE said on Wednesday that it had halted "major operating activities".

"President Xi of China, and I, are working together to give massive Chinese phone company, ZTE, a way to get back into business, fast", tweeted Trump. 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 USA may be getting from China in return, of if the move may be in some way related to the upcoming summit with North Korea.

The ban is the result of ZTE's failure to comply with that agreement, the Commerce Department said.

The threat of expulsion and restrictions was not enough to keep ZTE honest the first time around, so what the Department of Commerce can do this time is not known for the moment.

AFTER sparking fears of a global trade war with China just months ago, Donald Trump had made a surprising pledge. There's clearly a gap of thinking between the President and the rest of government. USA companies that export to China have seen their goods held up at China's ports amid tougher inspections.

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

Chinese officials raised their objections to ZTE's punishment at trade talk in Beijing earlier this month, and the American delegation agreed to report them to Trump.




ZTE has asked the department to suspend the seven-year ban on doing business with United States technology exporters.

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. He has often cast the country's business practices as a threat to the American workforce, and announced in March his administration would impose $50 billion worth of tariffs on imported Chinese goods to combat what he described as "unfair" trade practices by China. Both sides had been expected to dig in for a fight over their trade imbalance at this week's talks.

While the United States and China have threatened each other with trade tariffs, Trump has insisted that relations between Washington and Beijing have never been better and he has been working closely with Xi in efforts to persuade North Korea to abandon its nuclear program.

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

That cut off access to the U.S. technology it needs to build most of its products, from Qualcomm's semiconductors to optical chips from Lumentum Holdings.

Trump expects Commerce Secretary Wilbur Ross "to exercise his independent judgment, consistent with applicable laws and regulations, to resolve the regulatory action involving ZTE based on its facts", Walters said.

Even with Trump's unexpected backing, ZTE is up against it to roll back the sanctions.

More: Spy games: Is buying a Chinese smartphone risky?

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