Donald Trump pledges to help rescue Chinese telecoms giant ZTE

Donald Trump pledges to help rescue Chinese telecoms giant ZTE

President Donald Trump said Sunday he has instructed his Commerce Department to help get a Chinese telecommunications company "back into business" after the USA government cut off access to its American suppliers.

But Trump has now said he is working with China's President Xi Jinping to save the company.

The whole thing led many to speculate about whether or not Trump had another reason for his sudden about-face on ZTE. Those mandated reprimands never happened and it was this that triggered the Department of Commerce's move last month to officially ban U.S exports to the company.

The ban is the result of ZTE's failure to comply with an agreement with the US government after it pleaded guilty a year ago to conspiring to violate USA sanctions by illegally shipping USA goods and technology to Iran, the Commerce Department said.

As one of the world's largest telecom equipment makers, ZTE relied on US companies such as Qualcomm and Intel for components. In a statement Wednesday, ZTE said "the major operating activities of the company have ceased".

According to the U.S. Government, the step was taken because the company had failed to comply with a settlement related to ZTE shipping U.S. -made goods to Iran in violation of U.S. sanctions. By cutting off access to United States suppliers of essential components such as microchips, the ban threatens ZTE's existence, the company has said.

Ordering a denial may have been the Commerce Department's idea of playing hardball to force compliance.




Last week, the company said that its earnings have surged, reporting a 39 percent jump in net income for the first quarter.

The company employs around 80,000 people in China.

ZTE is not among Qualcomm's publicly disclosed largest customers, which include Apple Inc, Samsung Electronics Co Ltd and Chinese smartphone makers Oppo and Vivo.

The ban also hurts ZTE's ability to provide services, such as repairs to infrastructure, to customers in other countries and regions in which it operates.

The official said the recent ban was a grossly disproportionate penalty that ignored the strides ZTE had made towards complying with United States laws.

For instance, MTN, a South Africa-based wireless carrier with 220 million customers throughout Africa and the Middle East, said the possibility ZTE would collapse forced the carrier to develop contingency plans.

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