President changes tone on China company, pledges help

President Donald Trump pledged on Sunday to help Chinese phone manufacturer ZTE return to business, days after the company said it would cease “major operating activities” because of the U.S. government’s recent trade restrictions, a dramatic shift in tone for a president who has long accused China of stealing U.S. jobs.

“President Xi of China, and I, are working together to give massive Chinese phone company, ZTE, a way to get back into business, fast,” Trump tweeted. “Too many jobs in China lost. Commerce Department has been instructed to get it done!”

The comment could presage a reversal of one of the Trump administration’s toughest actions to date against a Chinese company. In April, the Commerce Department penalized ZTE for violating a settlement with the U.S. government over illegal shipments to Iran and North Korea. As a result, the Trump administration barred U.S. firms for seven years from exporting critical microchips and other parts to ZTE, the world’s fourth-largest smartphone manufacturer.

ZTE then halted operations, stressing in a statement Wednesday that it was “actively communicating with the relevant U.S. government departments in order to facilitate the modification or reversal” of the Commerce Department’s order.

The development stunned trade and national security experts.

The Treasury Department and the Commerce Department had been strongly aligned against ZTE as recently as several days ago.

It’s highly unusual for a president to personally intervene in a regulatory matter and could undercut the leverage of Treasury and Commerce officials seeking to enforce sanctions and trade rules.

“It seems to cut across the concern about tech competition with China, supplying Iran, and jobs in China, so it all seems pretty confusing,” Adam Segal, the director of the Digital and Cyberspace Policy Program at the Council on Foreign Relations, said of Trump’s tweet. “That’s why everybody’s so flabbergasted by it.”

Shortly after Trump’s tweet, Rep. Adam Schiff, D-Calif., responded, “Our intelligence agencies have warned that ZTE technology and phones pose a major cyber security threat. You should care more about our national security than Chinese jobs.”

In a statement, White House spokeswoman Lindsay Walters said, “President Trump expects [Commerce] Secretary [Wilbur] Ross to exercise his independent judgment, consistent with applicable laws and regulations, to resolve the regulatory action involving ZTE based on its facts."

A ZTE spokesman also did not respond to an email seeking comment.

Trump’s tweet on Sunday comes before U.S. officials are planning to meet with Liu He, one of Chinese President Xi Jinping’s closest advisers, to discuss the strained trade ties. That meeting is expected to be held in Washington this week or next.