President Trump has ordered the U.S. Commerce Department to reconsider the status of ZTE, the Chinese telecom company that ceased major operations after being banned from buying American technology for seven years.
The sanction, along with a $1.1 billion fine, were imposed after the mobile phone maker lied about punishing the employees responsible for making illegal tech shipments to North Korea and Iran.
Trump’s olive branch was a concession to China, which demanded relief for ZTE in exchange for working out a broad trade agreement between the two nations. But his concern over restoring Chinese jobs, as expressed yesterday in a tweet, seemingly runs contrary to the “America first” rhetoric of his presidential campaign.
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
However, last year some 200 U.S. companies received more than $2.3 billion in orders from ZTE, which depends on American suppliers for a quarter of the components used in its smartphones and networking equipment.
ZTE, the large Chinese phone company, buys a big percentage of individual parts from U.S. companies. This is also reflective of the larger trade deal we are negotiating with China and my personal relationship with President Xi.
— Donald J. Trump (@realDonaldTrump) May 14, 2018
As the manufacturer itself noted in response to the Commerce Department’s sanction, the tech ban “will not only severely impact the survival and development of ZTE, but will also cause damages to all partners of ZTE including a large number of U.S. companies.”
The president’s change of heart also coincides with a long-negotiated $500 million loan from the Chinese government to help build an Indonesian resort featuring a Trump Organization golf course and hotels, the National Review reported.
On the consumer side, ZTE has become the fourth-largest mobile phone brand in the U.S., having earned a reputation among enthusiasts for its highly featured but aggressively priced handsets, which are sold through MVNOs like Cricket and TracFone, direct by ZTE, and through retailers including Best Buy and Walmart.
But phones made by ZTE, as well as by China’s Huawei, have been banned from U.S. military bases and were cited as potential security risks by the heads of the FBI, CIA, NSA and other national intelligence agencies during a Senate Intelligence Committee hearing in February. When famously asked by Sen. Tom Cotton (R-Ark.) to raise their hands if they would recommend that consumers use those companies’ phones, none did.