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Trump reverses course on ZTE, citing job losses in China


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Trump signs an executive order earlier this year. (Image: file photo)

United States President Donald Trump has characteristically taken to Twitter to announce that he has directed the US Department of Commerce to allow ZTE to operate again.

“President Xi of China, and I, are working together to give massive Chinese phone company, ZTE, a way to get back into business, fast,” the president tweeted on Sunday, US time.

“Too many jobs in China lost. Commerce Department has been instructed to get it done!”

Trump added later on Sunday that the United States and China are working well together on trade.

“Past negotiations have been so one sided in favor of China, for so many years, that it is hard for them to make a deal that benefits both countries,” he said.

“But be cool, it will all work out!”

The shift in attitude comes less than a week after ZTE said it was ceasing “major operating activities” due to export sanctions placed on it by the US government, after the Department of Commerce said ZTE lied to the Bureau of Industry and Security about disciplinary actions supposedly enforced on senior employees relating to the illegal shipments to Iran and North Korea, and paid full bonuses to employees who had engaged in illegal conduct.

“ZTE misled the Department of Commerce. Instead of reprimanding ZTE staff and senior management, ZTE rewarded them. This egregious behavior cannot be ignored,” US Secretary of Commerce Wilbur Ross said in April.

The company was subsequently slapped with a ban on purchasing components and software from US manufacturers for seven years.

At the time, ZTE said the US ban would threaten the survival of the company and its partners, including some US companies.

In March 2017, ZTE had been fined $1.2 billion by the United States for directly, or through third-party distributors, shipping $32 million worth of products containing American-made equipment to Iran between 2010 and 2016 without the proper licensing.

ZTE was similarly the subject of a 2012 investigation by the FBI and US Commerce Department after allegedly setting up a network of sub-companies to illegally export Microsoft, HP, Oracle, Dell, Cisco, and Symantec products to Iran.

In February, the heads of the CIA, FBI, NSA, and the director of national intelligence to the Senate Intelligence Committee also recommended that Americans not use products from Huawei and ZTE.

“We’re deeply concerned about the risks of allowing any company or entity that is beholden to foreign governments that don’t share our values to gain positions of power inside our telecommunications networks,” FBI Director Christopher Wray said at the time.

“That provides the capacity to exert pressure or control over our telecommunications infrastructure. It provides the capacity to maliciously modify or steal information. And it provides the capacity to conduct undetected espionage.”

Last month, the UK National Cyber Security Centre reportedly sent a letter to British telcos warning of the risks of using ZTE equipment, which would create national security risks that could not be mitigated against.

Australian telco giant Telstra last week said in the wake of the ZTE export ban that it would stop selling white-labelled products from the Chinese networking behemoth.

Related Coverage

ZTE ceases main operations after US ban

In a Hong Kong Exchanges filing on Wednesday, ZTE told investors that ‘major operating activities of the company have ceased’ because of the US Commerce Department’s export ban.

Telstra ends sale of ZTE white-labelled devices

The first domino falls after the Chinese manufacturer announced it is ceasing its major operations.

RIP ZTE: Which Chinese smartphone company is next?

Why is this even possible, in this day and age, that a multi-billion dollar Chinese telecommunications company with thousands of employees is effectively forced to close overnight?

ZTE employees asked to learn US laws and pass compliance test

The Chinese smartphone maker was earlier this week hit with seven-year-long export restrictions by the US.

UK telcos warned on use of ZTE equipment: Report

The UK National Cyber Security Centre has reportedly sent a letter to telcos warning of the risks of using ZTE equipment.

ZTE returns to full-year profit normality after 2016 aberration

Without a set of fines to pay, the Chinese networking giant returned to posting more than 4 billion yuan of profit for the full year.

US intelligence chiefs say Huawei, ZTE products pose national security risk (TechRepublic)

US intelligence service leaders have repeated claims of Huawei collaborating with the Chinese government since 2012, but have provided no evidence.



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