After U.S. announced to ban American companies from selling telecoms equipment to China’s ZTE, Trump’s role in the script of “Trade war” has sharply switched from an “attracter” to a “savior”. On May 13th, the White House senior officials said President Trump will help ZTE Corp “get back into business, fast,” in a concession to Beijing before the trade talks this week.
Before that, ZTE has suspended its main operations under the sanction for its illegal shipment to Iran, which was violated an agreement with U.S. The seven-year punishment may lead ZTE, one of the world’s telecom giants to the end, since there’s no American supplier allowed to sell chips to ZTE, which serve as the heart of the smartphone.
To relief the escalating trade war, Chinese delegation led by Mr. Liu He, China’s top economic official, is expected to arrive and stay in Washington for trade talks with senior Trump administration officials.
The main purpose of the trade talk has been indicated in Trump’s tweet on Sunday, in Trump’s tweet, the Commerce Department has been instructed to tackle the side effects raised by the ZTE ban, which seemed to increase the likelihood that the two counties could soon pull back from the brink of the dispute.
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
Trump’s officers also surprised by his about-face on ZTE, to rescue a Chinese firm which has concerned intelligence agencies for years in the name of U.S. president, who advocated “America first” policy.
Many analysts warned that U.S. would taste the bittiness for Trump’s inexplicably policy shift to China. The president of the Alliance for American Manufacturing, Scott Paul, called Trump’s tweet on ZTE “indefensible”, given that ZTE had been found breaking U.S. laws and would be a security threat to the U.S.
“Rhetorically this is a big change,” said Derek Scissors, a scholar working at the American Enterprise Institute. When talking about the actions, he added:” Trump’s highest-impact strike against China thus far was in fact the ZTE penalty, which now looks to be coming off.”
The Beijing side holds firm attitude. According to the person briefed on preparatory discussions for Mr. Liu’s trip, ZTE case will be the top priority to resolve and they will insist on the progress before any new talks can be held. Meanwhile, the ZTE ban also appeared to be part of a broader bargain under the unexpected tariff plan on U.S. agricultural products. Beijing has been irate about the sanction, Mr. Liu has told U.S. negotiators that there won’t be any chance if U.S. agrees to remove the seven-year punishment of ZTE.
Another reason to save ZTE may be Trump’s plan to seek China’s cooperation, and continued pressure, on North Korea as he prepares for his summit with the Kim Jong Un, in Singapore on June 12.
It’s an unusual step for a president to intercede in a case resulted from the Commerce Department and to mix regulatory sanctions with trade negotiations. However, Trump’s intention to save ZTE could make cellphones and other telecom equipment, has the potential to clear the way for progress.