USA will help China's ZTE 'get back into business'

USA will help China's ZTE 'get back into business'

President Donald Trump has instructed his Commerce Department to help get a Chinese telecommunications company get "back into business" after the USA government cut off access to its American suppliers.

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.

In remarks that left many puzzled earlier Sunday, Trump said he was working with Beijing to get Chinese telecommunications giant ZTE "back into business". Too many jobs in China lost.

The firm suspended its main operations after the United States commerce department banned American companies from selling it components for seven years.

Chinese telecom giant ZTE said its major operations had "ceased" following last month's U.S. ban on American sales of critical technology to the company, raising the possibility of its collapse. CNET's source says ZTE can still use Android for commercial purposes since the operating system is open-source but can't obtain any licenses directly from Google, meaning it would be forced to ship devices which can't access the Google Play Store or any of the Alphabet-owned firm's apps, all of which are inseparable from the core Android experience in every market outside of China. "Major operating activities of the company have ceased", ZTE said in a filing Wednesday. As a result, the Trump administration barred US firms for seven years from exporting parts to ZTE, the fourth-largest smartphone manufacturer in China, including critical microchips.

According to the U.S. Government, the step was taken because the company had failed to comply with a settlement related to ZTE shipping U.S. -made goods to Iran in violation of U.S. sanctions.

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Those actions led to a $1.2 billion fine past year, with the current export ban imposed in April after ZTE allegedly failed to live up to its agreement, lying about the punishment of employees involved in the sanctions skirting.

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.

The conciliatory move quickly came under fire, with critics pointing out the administration was acting to rescue a firm that USA intelligence officials considered an espionage threat. The Defense Department last month ordered military exchanges to end the sale of ZTE phones on US bases. "You should care more about our national security than Chinese jobs".

The Trump administration has used the premise of national security to block a number of business deals that would see Chinese companies buying up American firms - including Alibaba's proposed acquisition of MoneyGram and Broadcom's effort to buy Qualcomm.

National security advisor "John Bolton threatened sanctions on North Atlantic Treaty Organisation allies who continue to trade w Iran".

Trump's willingness to aid ZTE comes after the two nations have spent parts of recent months trading tariff threats. "But be cool, it will all work out!"

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