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    Why is Trump trying to save a Chinese tech company that broke US sanctions?
    Why is Trump trying to save a Chinese tech company that broke US sanctions?
    POLITICS

    Why is Trump trying to save a Chinese tech company that broke US sanctions?

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    by
    Alan Wong
    Alan Wong
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    Since when did President Trump care about jobs in China?

    Never, until he tweeted this:

    Trump promised to be the “greatest jobs president God ever created” during his presidential campaign, but it had always been about boosting American jobs.

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    On Twitter, whenever he had mentioned China and jobs in one breath, he was almost always accusing the country of “stealing” them from the United States.

    That’s why the Sunday tweet was such an unusual departure.

    To understand the context, there’s perhaps no better place to start than this tweet, by an account that satirizes Chinese organs (as in government departments):

    (Swipe to the next story if you get the joke, but scroll on if you don’t.)

    Chinese telecoms equipment-maker ZTE said last week it had ceased major operations, after the US government blocked its access to American components until 2025.
    Chinese telecoms equipment-maker ZTE said last week it had ceased major operations, after the US government blocked its access to American components until 2025. Photo: Reuters

    Executive reprieve

    ZTE is a Chinese telecoms heavyweight that was brought to the brink of collapse after the US government punished it for violating its export sanctions against Iran.

    It’s unclear whether the US Commerce Department will follow through with Trump’s request and how, but Trump’s move to reprieve the Chinese company has troubled some analysts.

    “In a single tweet, Mr Trump has not only undermined the narrative that the ZTE case was a violation of US export law, but also the credibility of his own department,” Nick Marro, an China analyst with the Economist Intelligence Unit, told Inkstone.

    The US had hit ZTE with a seven-year ban on buying US parts because it allegedly covered up illegal exports of equipment to Iran and failed to punish the responsible employees.

    On Monday, Beijing “commended” the US reversal on the company, saying that Chinese officials are working closely with the US on the details on easing the ban.

    ZTE, the world’s fourth largest telecommunications equipment supplier, said the US punishment was harsh and unfair and would hurt the 80,000 people it employed and thousands of companies it did business with, including American ones.

    Trump needs China’s cooperation to apply economic pressure to North Korea.
    Trump needs China’s cooperation to apply economic pressure to North Korea. Photo: AFP PHOTO/KCNA VIA KNS

    Bargaining chip?

    The Chinese government has taken up the company’s grievances, asking that the US “adjust” the ban as the two countries began talks early this month to resolve a trade conflict that risks disrupting global commerce, according to a draft list of demands seen by the South China Morning Post.

    These talks resume on Tuesday, when China’s vice-premier Liu He visits Washington to meet with Trump’s economic advisors.

    It’s not clear what China would offer in return for Trump’s apparent concession.

    To complicate things further, Trump and his North Korean counterpart, Kim Jong-un, are set to fly out to Singapore on June 12 to meet and talk about denuclearization on the Korean Peninsula.

    China, North Korea’s largest trade partner, is key to enforcing any sanctions on its neighbor. To use economic pressure as a leverage against North Korea, Trump needs China to cooperate.

    But by using his power to reprieve a sanction-busting Chinese company as a bargaining chip, Trump is said to be putting more than just US credibility (in enforcing its own trade law) on the line.

    If that’s really the case, Trump would be wise to think twice before using the theoretical “24k gold ZTE phone” for his personal correspondence.

    ALAN WONG
    ALAN WONG
    Alan is editor at Inkstone. He was previously a digital editor for The New York Times in Hong Kong.

    ALAN WONG
    ALAN WONG
    Alan is editor at Inkstone. He was previously a digital editor for The New York Times in Hong Kong.

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