U.S. President Donald Trump and China President Xi Jinping are working together to solve the issues faced by Chinese telecom company ZTE following the seven-year ban imposed by the American administration.
China requested that President Donald Trump back off his threat of tariffs on Chinese imports, treat Chinese investments equally under US security reviews, and reassess the ban on ZTE.
Lewis said that with companies like Huawei and ZTE facing obstacles in the United States, "American companies see the opening to the China market closing more rapidly than they might have thought". Trump wrote on Twitter. The Chinese company began 2018 as a well-regarded phone maker, particularly for supplying dependable budget models to US carriers. But now, barred from using US microchips, software and other components, ZTE has been facing the prospect of being unable to manufacture its telecommunications equipment and smartphones.
The ban on U.S. sales to the firm arose from its skirting of USA export controls by selling to banned countries like North Korea and Iran with employees documenting how to evade American oversight. 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. Unlike many other Chinese smartphone makers, ZTE's Android phones are also popular in the U.S, thanks to low-priced phones and savvy marketing ploys (the company's sponsored five National Basketball Association teams, including the Golden State Warriors).
Trump's offer to help comes as Chinese and U.S. officials prepare for talks in Washington with China's top trade official Liu He to resolve an escalating trade dispute between the world's two largest economies.
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The ban also hurts ZTE's ability to provide services, such as repairs to infrastructure, to customers in other countries and regions in which it operates. US companies that export to China have seen their goods held up at China's ports amid tougher inspections. In a stark announcement earlier this week, the Chinese telecom giant confirmed it was shutting down "major operating activities". "But be cool, it will all work out!" And he has trumpeted his efforts to safeguard U.S.jobs even if it means creating economic strain in other countries.
At the Beijing talks, the Trump administration handed China a list of hard-line demands that trade experts said could make it even more hard to resolve the trade disputes.
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".
Trump's announcement drew sharp criticism from a Democratic lawmaker, who said the move was jeopardizing US national security. "You should care more about our national security than Chinese jobs". Last week, Telstra said it would stop sales of ZTE smartphones, though it indicated it was "hopeful that ZTE will be able to reach a resolution to this matter soon so that we can recommence selling Telstra-branded ZTE devices".
Shares of ZTE suppliers including Acacia, Oclaro, Lumentum Holdings Inc, Finisar Corp, Inphi Corp and Fabrinet fell sharply after the ban was announced.