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article imageTrump does about-face – Now working to save ZTE after crushing it

By Karen Graham     May 13, 2018 in Politics
Washington - President Donald Trump announced to the world today, via a Tweet, that he has decided to work with President Xi of China in getting Chinese telecommunications company, ZTE "back into business, fast." So, what's up?
ZTE, which has 70,000 employees across 160 countries around the world, announced Wednesday that it was stopping "major operating activities." It is also the fourth largest provider of cell phones in the United States.
Shortly after the president's Tweet, a Democratic lawmaker questioned the move, given the administration's so-called warnings over "ZTE's alleged threat to U.S. national security," reports Reuters.
President Donald Trump
"Given his pressure on Beijing on trade, I don’t understand the concern for Chinese jobs," says technology and security expert Adam Segal. In fact, many analysts are "initially scratching their heads," the New York Times says,
In April, the Trump administration blocked American firms from selling parts or providing services to ZTE until 2025. The ban was put in place after the Commerce Department said ZTE violated a deal struck last year in which ZTE agreed to pay a $1.2 billion fine for violating US sanctions on Iran and North Korea.
Actually, as I wrote in Digital Journal last month, the U.S. is concerned over ZTE and Huawei's burgeoning 5G research successes. Technologies like expanded transmitting capabilities are seen as crucial for a host of emerging technologies based on artificial intelligence - including self-driving vehicles, robots and other machines that transmit vast amounts of data in real time.
That's why the companies are seen as a threat to U.S. technology companies and don't think Trump hasn't thought of this. The U.S. has been talking to officials in Canada and Europe, warning them - suggesting that Huawei's long-range global prospects could end up hurting them, and I would suspect that ZTE was also mentioned.
Easing tensions with China
But an even bigger worry for Trump is the looming trade war brewing between China and the U.S. White House spokeswoman Lindsay Walters confirmed today that U.S. officials are in contact with Beijing about ZTE. She said Trump’s tweet underscored the importance of “free, fair, balanced and mutually beneficial” relations between the U.S. and China.
The thing that gets me angry about Trump's change of mind is that both ZTE and Huawei were the subject of a 2012 House Intelligence Committee report that warned U.S. telecom operators not to do business with the companies, saying "they posed a national-security threat."
This is because the major shareholder of ZTE is Shenzhen Zhongxingxin Telecommunications Equipment, a Chinese state-owned corporation. It was Adam Schiff, a Democratic congressman from California, who responded to Trump's tweet Sunday, saying he "should care more about our national security than Chinese jobs."
Representative Adam Shiff
What the heck is going on?
Actually, the reversal by the Trump administration comes just before trade talks in Washington between U.S. officials and China’s top trade official Liu in an effort to ease tensions between the two countries. But most people don't know that Beijing has already let it be known that resolving the ZTE issue is one of its demands for striking a broader trade agreement with US, reports the BBC.
But there is more to this story than just a trade war and sanctions being imposed on a company who sold electronic components to Iran last year. For one thing, ZTE imports more than $2.3 billion in component parts from about 200 U.S. companies yearly.
Douglas Jacobson, a lawyer in Washington DC who represents some of ZTE's suppliers, said: "This is a fascinating development in a highly unusual case that has gone from a sanctions and export control case to a geopolitical one."
"There's no legal mechanism for this. How this will play out remains to be seen. They are not simply going to be able to resume business as usual."
More about ZTE, china trade talks, Trump, Commerce department, Technology
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