Trump encounters capo dei capi

The conversation between the presidents of China and the US may have gone something like this: “Nice little tech industry, you’ve got there, Donald. Shame if anything were to happen to it. My cadres are nice boys but highly strung. If something upsets them — the wallpaper, trade sanctions, whatever — bad things can happen.”

President Donald Trump’s concern for the employees of ZTE, the Chinese telecoms equipment maker hit by US sanctions, suggests someone hefty had a quiet word with him. He has asked the commerce department to reconsider its punishment of the company for alleged breaches of prohibitions on trading with Iran.

Chinese workers are more stoical in the face of patriotic hardship than US capitalists. US industrialists are scared of competition and intellectual property theft. But losing foreign markets frightens some of them even more. Apple, Broadcom and Nvidia all earn a fifth of their revenue in China. Almost 30 US groups with market share worth in excess of $1bn each make at least 15% of their revenue in China. Their sales in the Middle Kingdom total $80bn. Two-thirds of them are chip or electronics groups.

JPMorgan and BlackRock are the second- and thirdlargest holders of ZTE’s Hong Kong-listed shares, suspended since April. Never a good idea to pick on a guy who can absorb and dish out more punishment than you, Mr President. London, May 15