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Donald Trump to ZTE's rescue?

May 14, 2018

In a surprise move, US President Donald Trump has said he's willing to help China prevent its telecom giant ZTE from going out of business. The company is still reeling from a US technology sales ban.

ZTE smartphone
Image: Getty Images/AFP/J. Lago

Writing on Twitter, US President Donald Trump said he's issued instructions for officials to come up with a rescue plan for troubled Chinese telecom behemoth ZTE, saying too many jobs were at risk.

ZTE said last week that its major operations had come to a halt after being banned for seven years from buying critical US technology, raising the possibility of the firm's collapse. Its fiber-optic networks depend on US components, and its cheap smartphones are powered by American chips and the Android operating system.

The ban was imposed as US authorities suspected ZTE of providing false statements over action it claimed to have taken regarding the illegal sale of goods to Iran and North Korea.

A bargaining chip?

The Washington Post reported late Sunday that the White House and senior Chinese officials were discussing a deal which would relax the severe penalties on ZTE in exchange for unspecified demands from the American president.

The newspaper argued the Chinese company had become a bargaining chip as Washington sought trade-related concessions from Beijing while pushing for cooperation on sanctions against North Korea and Iran.

China's top economic official, Vice Premier Liu He, is due in Washington this week for trade talks.

Trump's conciliatory move quickly came under fire domestically. David Frum, a former speech writer for George W. Bush, said the president was sending mixed signals after scrapping the Iran nuclear deal and threatening sanctions on European countries that continued to do business with Tehran.

"How about helping some American companies first?" Democratic Senate Minority Leader Chuck Schumer asked in response to Trump's tweet.

hg/tr (AFP, AP)