Embattled Chinese phone manufacturer ZTE, the subject of a US trade ban, may find themselves back in business with support from a surprising source: the President of the United States, one Donald J Trump.
The following tweet went out from President Trump’s account in the early hours of the morning:
President Xi of China, and I, are working together to give massive Chinese phone company, ZTE, a way to get back into business, fast. Too many jobs in China lost. Commerce Department has been instructed to get it done!
— Donald J. Trump (@realDonaldTrump) May 13, 2018
The tweet is the latest political development in the saga.
The US Department of Commerce issued the trade ban following its determination of a violation of terms ZTE had agreed to after it was found selling embargoed technology to Iran in 2012. ZTE and it’s subsidiaries are banned from obtaining US technology for seven years, putting the company’s ability to license Android for their smartphone business and technologies and patents for their infrastructure business.
The US ban followed an edict earlier in the year against Huawei, also a Chinese manufacturer, that caused a carrier sales deal to fall through just as it was set to be announced at CES. The US concerns over Huawei were said to be related to theft and misuse of users’ personal data, with a subtext of espionage. US government employees may not use Huawei devices.
The US and China have also been posturing over import tariffs on particular goods, a move that could ignite a trade war.
Chinese President Xi Jinping has been said to be considering reprisals for the actions taken against both Huawei and ZTE, but until now there’d been no public confirmation of such.
ZTE confirmed last week that it has essentially shut down in the wake of the ban, pausing production lines and suspending business travel as it seeks legal remedies to get the trade ban overturned.
Locally last week, we also saw ZTE-manufactured handsets and WiFi equipment removed from sale from Telstra stores as a result of the ban. ZTE’s Australian web presence is currently redirecting its parent Chinese website.
Trump’s tweet confirms high level concerns on both sides of the Pacific over the effect the trade ban will have on ZTE and its employees. It’s surprising to see this action confirmed by the President, and such concern over Chinese jobs given that the US Department of Commerce is ostensibly protecting US interests in enforcing its technology export sanctions.
Given ZTE’s operations are currently mostly suspended and not bringing in revenue for the company, whatever negotiations take place in the next two weeks are of vital importance in determining the company’s future.