Published: Thu, May 17, 2018
Culture | By Margie Dunn

Trump says China talks in early stages amid ZTE backlash

Trump says China talks in early stages amid ZTE backlash

President Donald Trump on Wednesday dismissed criticism that he was caving to China's trade demands to save Chinese telecommunications company ZTE.

The company faced collapse as a result and Trump said Sunday he and Chinese President Xi Jinping were exploring ways to get the company "back into business fast."Commerce Secretary Wilbur Ross also said Monday the U.S. was looking at "alternative remedies" for the April sanctions".

White House economic adviser Larry Kudlow said on Tuesday it was far from certain what steps the USA government would take on China's ZTE Corp, which he characterized as an enforcement, rather than trade, issue.

Trump's public statements have muddled that message. Trump said in a tweet. "Nothing has happened with ZTE except as it pertains to the larger trade deal", he said on Twitter. Given the Commerce Department security bureau's findings, based on an extensive US investigation going back to the Obama administration, the punishment fit the crime; indeed, the Trump administration had let ZTE off with a fine and probation in March 2017, only to discover that it continued to lie and cover up its lack of compliance. Trump tweeted about possible relief four days later. "Too many jobs in China lost". Florida Republican Sen. Marco Rubio said the move was a sign that the USA was about to "get out-negotiated by China again".

"About to get out negotiated by #China again", Rubio tweeted Tuesday. "Why are we helping them achieve this by making a awful deal on ZTE?" Sen. Liu will also meet with Sen.

Trump's "comments about ZTE sound an alarm bell for counterintelligence, cyber security, & red, white and blue jobs", Wyden tweeted Tuesday.

The company shut its main operations after the Commerce Department last month banned USA companies from selling components to ZTE for seven years for violating the terms of a settlement deal for illegally shipping goods made with US parts to Iran and North Korea.

Democratic Senator Ron Wyden warned against giving sanctions relief to ZTE.

Derek Scissors, a resident scholar at the American Enterprise Institute, said that reversing the sanctions as part of a trade deal would break norms of trade talks and undermine the USA position to demand reforms from the Chinese government. "It's really divorced from the trade story", Kudlow said. However, after strong criticism of Trump's apparent policy U-turn by USA lawmakers, the USA president tweeted on Wednesday that nothing had been decided yet. "Our country has been losing hundreds of billions of dollars a year with China". China reciprocated by relaxing its previous opposition to US -based Qualcomm's proposed acquisition of semiconductor maker NXP, and by offering to lift its threat of tariffs on USA agricultural goods (which were provoked by Trump's tariff threats against China to begin with).

The meetings in Washington this week follow trade talks in Beijing earlier this month where the two countries failed to reach an agreement on the long list of United States demands, including a $200 billion (€169 billion) reduction in China's trade surplus with the USA, which totaled $375 billion previous year.

"We also have to understand that China is an adversary, and I think long-term they're actually our biggest adversary, whether that's economic or military", said Kinzinger.

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