Trump Vows to Save Jobs at China’s ZTE Lost After U.S. Sanctions

Posted May 13, 2018 1:01 p.m. EDT

SHANGHAI — President Donald Trump tweeted on Sunday that he was working with his Chinese counterpart, Xi Jinping, to prevent the collapse of the Chinese electronics giant ZTE, which shut down major operations after being sanctioned by the U.S. Department of Commerce last month.

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

The department last month banned shipments of U.S. technology to ZTE for seven years, saying the company had failed to reprimand employees who violated U.S. trade controls on Iran and North Korea.

The company had already agreed last year to a $1.2 billion fine in connection with those violations. But now, barred from using U.S. microchips, software and other components, ZTE struggled to manufacture its telecommunications equipment and smartphones.

The tweet flies in the face of recent comments from the Trump administration, which has been consistently combative about Chinese trade policy and taken a stern tone about ZTE’s breaking of U.S. sanctions.

The company said on Wednesday that it had halted “major operating activities.” It has 75,000 employees and says it has business in more than 160 nations. Although large U.S. wireless carriers do not use the company’s telecom equipment out of security concerns, it is the No. 4 smartphone brand in the United States, behind Apple, Samsung and LG.

The case comes as the United States and China have intensified their conflicts over trade imbalances and leadership in cutting-edge technology. U.S. officials who visited Beijing earlier this month brought a list of demands for the Chinese government that included a halt to all subsidies to advanced manufacturing industries. Chinese officials also raised objections to the penalties on ZTE.

No deal was reached. Liu He, a top economic adviser to Xi, is due to visit Washington soon to follow up on discussions.

The U.S. government is also investigating ZTE’s larger rival, Huawei, for breaking U.S. sanctions to a number of countries, including Iran and North Korea. Much larger than ZTE and far more critical to China’s industrial policy plans, Huawei could be a much larger chip in ongoing trade negotiations.