Trump switch to defend ZTE stirs backlash
Reversal comes ahead of talks with China trade official
WASHINGTON — President Donald Trump’s change in stance toward a Chinese telecom-equipment maker that his administration recently sanctioned drew widespread rebuke Monday, even as it seemed to increase the likelihood that the U.S. and China could soon pull back from the brink of a trade war.
China’s top economic official, Vice Premier Liu He, is expected to arrive in Washington on Tuesday for several days of meetings with senior Trump administration officials. And Trump’s tweet Sunday that he and Chinese President Xi Jinping are working together to help save ZTE could be a sign that Trump is looking for a potential deal to avert massive tariffs threatened by both sides.
The Trump administration in April banned U.S. companies from selling parts to ZTE for violating a previous settlement over illegal shipments to Iran, penalties so crippling that they were endangering the survival of the big Shenzhenbased company. Critics of China’s mercantilist policies had applauded the sanctions, and saw them as an indication of the seriousness in which the administration was pursuing change in Beijing.
Trump’s about-face on ZTE apparently surprised his own officials, and it was all the more remarkable because the president — advocate of the “America first” policy — tweeted as a reason that “too many jobs in China (would be) lost.”
Scott Paul, president of the Alliance for American Manufacturing, called Trump’s tweet on ZTE “indefensible,” given that the company had been found breaking U.S. laws and was considered by many to be a security threat to the U.S.
Other analysts warned that the president would pay a heavy political price for inexplicably backing away from his get-tough-onChina policy.
“Rhetorically this is a big change,” said Derek Scissors, a scholar at the American Enterprise Institute who specializes in China. In terms of actions, he said, Trump’s highest-impact strike against China thus far was in fact the ZTE penalty, which now looks to be coming off.
“I don’t think right now we can believe the president is willing to sustain any cost to take on the Chinese,” he said.
Michael Wessel, a longtime member of the U.S.China Economic and Security Review Commission, tweeted Monday that ZTE had already been told how to stay in business. “Abide by U.S. laws. They’ve broken the rules twice. Bad sign for upcoming trade talks and potential willingness of administration to settle for small steps.”
Trump, apparently reacting to the criticisms, including from lawmakers on both sides of the aisle, on Monday suggested that the softening toward ZTE was motivated by a desire to avoid harming American interests. “ZTE, the large Chinese phone company, buys a big percentage of individual parts from U.S. companies. This is also reflective of the larger trade deal we are negotiating with China and my personal relationship with President Xi.”
For American retailers and other businesses worried about tariffs and disruptions to trade and their supply chains, Trump’s pledge to help ZTE and the continuing talks between the two sides were seen as favorable developments.
“It gives us cause for optimism,” said David French, senior vice president of government relations at the National Retail Federation, which along with dozens of other business interests are appearing at a hearing starting Tuesday on the Trump administration’s proposed tariffs against China.
Scissors and other analysts said Trump may have backed away because of pressure from U.S. farmers, who already were finding more obstacles exporting into the big Chinese market.
There was also speculation that Trump’s step may have been in exchange for Beijing’s support for the president as he gears up to meet North Korean leader Kim Jong Un on June 12 in Singapore.
China has long been Pyongyang’s biggest benefactor, and its recent tightening of trade with North Korea, at Trump’s behest, is thought to have played a part in Kim’s agreement to meet Trump to discuss a denuclearization of the Korean Peninsula.