Trump steps into China dispute with offer to aid ZTE tech firm

Rescue of company could buy leverage in trade talks

WASHINGTON — A long-running dispute between American regulators and Chinese telecom company ZTE may have handed President Donald Trump some unexpected leverage in avoiding a trade war with Beijing.

Trump’s tweet Sunday that he was working with President Xi Jinping of China to put ZTE “back into business, fast” after U.S. sanctions threatened ZTE’s existence and 70,000 Chinese jobs caught many trade-watchers by surprise.

“Too many jobs in China lost,” Trump tweeted. “Commerce Department has been instructed to get it done!”

The overture came just as Vice Premier Liu He is flying to Washington for talks aimed at heading off a mutually harmful battle between the world’s two biggest economies and just before U.S. companies plan to plead during three days of hearings for a resolution to the dispute.

Trade analysts say it is highly unusual for a president to intercede in a case brought by the Commerce Department and to mix regulatory sanctions with trade negotiations. But they also note that Trump’s offer to rescue ZTE, which makes cellphones and other telecommunications equipment, has the potential to clear the way for progress.

“It’s a way to unlock negotiations,” said Wendy Cutler, a former U.S. trade negotiator specializing in Asia and now vice president at the Asia Society Policy Institute.

The United States has proposed imposing tariffs on up to $150 billion in Chinese products to punish Beijing for forcing American companies to hand over technology in exchange for access to the Chinese markets. In retaliation, Beijing is threatening tariffs on $50 billion in U.S. products.

“Trump’s tweet creates an atmosphere where there’s more hope for reaching an agreement on trade,” said David Dollar, senior fellow at the Brookings Institution and a former official at the World Bank and the U.S. Treasury Department.

The United States also needs China’s support as it prepares for talks with North Korea that are intended to persuade the Pyongyang regime to abandon nuclear weapons.