ICT

Trump, Jinping working to resolve ZTE crisis

Published

7 years ago

May 14, 2018

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United States President, Donald Trump says he is working with Chinese President Xi Jinping to find a way to overturn the ban on ZTE from importing US components.

ZTE, with about 75,000 employees, last week announced it shut down major operating activities following the implementation of the seven year ban in April on US companies shipping components and software to the vendor.

In its announcement, ZTE said it was working to find a resolution to the ban, which was imposed after the Department of Commerce ruled it made false statements during an investigation into violations of trade sanctions with Iran.

Australia-based operator Telstra last week pulled 19 ZTE smartphones and three other devices from its shelves as a result of the US decision.

The job-saving concession comes ahead of planned high-level trade talks this week and could ease tensions between the two countries following the US planning billions of dollars in tariffs on a range of products from China.

Earlier this month, China appealed to the US government for an amendment to the block during trade talks.

White House representative Lindsay Walters said the president expects commerce secretary Wilbur Ross “to exercise his independent judgment, consistent with applicable laws and regulations, to resolve the regulatory action involving ZTE based on its facts”, Reuters reported.

Trump’s pitch that the move is designed to preserve Chinese jobs may not be entirely altruistic: US jobs are also on the line if the ban is enforced given major US companies including Qualcomm and Google are key suppliers to ZTE.

In a high-level ZTE representative said the company spent $2.3 billion on exported US kit from 211 suppliers in 2017. Of those, the vendor paid Qualcomm, Texas Instruments and Intel more than $100 million apiece, the news agency stated.

Qualcomm warned of a likely impact on future earnings from the block in its recent fiscal Q2 2018 earnings announcement.