Embattled Chinese phone manufacturer ZTE saved by President Trump
Published : Sunday, 13 May, 2018POTUS urged the Commerce department to provide ZTE with "a way to get back into business, fast" via Twitter.
We can assume that President Trump is the new ally of the Chinese phone maker ZTE.
ZTE is the 4th largest smartphone manufacturer in America, and has been dealing with a United States Commerce Department denial order that doesn’t allow United States businesses to sell services or hardware to the company. This 7-year ban placed on ZTE has led to it shutting down its major operating activities.
However, it’s beginning to look like ZTE might get a pardon. President Trump on Sunday tweeted that he is working with Xi Jinping, the Chinese President, to see how the company can commence operations as soon as possible.
If this happens, it would be a plain reversal of the Commerce Department’s strict punishment to ZTE for failing to correctly admonish personnel involved in the selling of United States-origin equipment to Iran. ZTE has not relented on its efforts to see that the denial order is overturned and had attached its optimisms on wider bilateral trade talks between China and the United States.
It was surprising to see Trump tweet about his concern for the several Chinese jobs that have been lost as a result of the punitive punishment, especially as he’s always been all about protecting American jobs. However, ZTE’s argument has always been that it has invested huge amounts of money into the US economy. For instance, the company said it spent $2.34 billion on purchases from US businesses last year alone, according to a source close to the company.
To quote Doug Jacobson, an attorney with expertise in export controls and sanctions for Jacobson Burton Kelley, who represents suppliers that have business relationships with ZTE, "This is entirely unprecedented."
President Trump defended his perspective on ZTE via Twitter on Monday, stating that the company purchases its parts from American businesses. The Commerce Department pointed to the remark by Wilbur Ross (Commerce Secretary) at a National Press Club luncheon which was held on Monday, saying that he’s hopeful that a fair deal can be made. However, the U.S. economy will not be threatened if that fails to happen.
When ZTE was asked to comment, they declined.
This isn’t the first time President Trump is intervening in relations with foreign companies. Just this past March, he was able to squash a deal for Broadcom, a company with headquarters in Singapore, to purchase San Diego-based Qualcomm, due to concerns that it’d hurt the United States’ leadership in 5G technology.
Due to the ban by the Commerce Department, which prevents it from making use of critical parts of the Android operating system, as well as access to the Google Play store and improved versions of Android and security patches, ZTE had no choice but to close shop. Furthermore, they were not allowed to use carrier tools to provide software updates and security patches to existing phones.
ZTE was also denied access to critical networking equipment components, which it sells to different countries, such as Austria, Italy and India.