Trump support brings ZTE a step closer to resuming normal operations

  • A new report suggests ZTE may resume normal business operations in the coming weeks after the company was crippled by a recent trade ban.
  • The report suggests President Trump’s surprise backing has played a role in the turnaround.
  • China’s important role in upcoming agreements may also influence future U.S. decisions regarding ZTE.

ZTE may return to normal operations within the coming weeks following the seven-year export ban it received last month. ZTE, which is based in Shenzhen, announced last week that it had been forced to suspend major operations as a result of the ban, but President Trump has since said he is supporting the company’s recovery.

The U.S. banned exports to ZTE in April for its violation of a U.S. Iranian trade embargo. This had a significant impact on the company, said to be the fourth largest smartphone vendor in the U.S. before the ban, as it relies heavily on supplies from U.S. corporations such as Qualcomm and Intel.

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How screwed is ZTE right now?

It’s safe to say the rest of the world is glad to not be in ZTE’s shoes right now. ZTE Corp faces a seven-year ban on receiving technology from the United States. Reuters reported this means …

This move is believed to not only affect ZTE, with its estimated 80,000 worldwide staff members, but other state-controlled Chinese companies like its three major carriers.

Thanks to Trump’s surprising weekend tweet, and continued U.S. support, the South China Morning Post ^(http://www.scmp.com/tech/china-tech/article/2146004/zte-could-resume-operations-within-weeks-following-trumps-pledge) reported that the company could resume normal operations within “two-to-three weeks.” This speculation is, however, based on one possible outcome, and the U.S. Department of Commerce’s future decisions on the matter may not lead to such a rapid turnaround for ZTE.

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

— Donald J. Trump (@realDonaldTrump) May 13, 2018

Trump has since defended his comments regarding ZTE after coming under fire from Republican and Democrat parties. According to the South China Morning Post, Trump said:

“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.”

Trump’s actions may also be related to Qualcomm’s potential $44 billion acquisition of Dutch firm NXP Semiconductors. As the world’s largest importer of semiconductors, China has a say in the deal, which would be lucrative for electronics giant Qualcomm. Chinese authorities have apparently urged the Chinese Ministry of Commerce to restart their review ^(http://www.scmp.com/tech/enterprises/article/2146028/china-restarts-review-qualcomms-us44b-nxp-purchase) of the acquisition in light of the show of good faith from the U.S..

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Trump working with China to get ZTE “back in business”

Wikimedia Commons A few days ago, things were looking bleak for China’s smartphone company ZTE. The company admitted earlier this week that it had ended its “major” business operations, due to a hardware supply ban …

Additionally, The Wall Street Journal (paywall)‘s sources point to another possible result of U.S. leniency towards ZTE. China may “agree to hold back tariffs on a variety of U.S. agricultural products it announced in early April as retaliation for U.S. tariffs on Chinese steel and aluminum exports,” The Wall Street Journal wrote. The agricultural products are said to be worth billions of dollars to the US.

Chinese Vice Premier Liu Yandong is said to be visiting Washington from today until the end of the week to discuss the matters.

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Author: Marshmallow

Marshmallow Android is BT Ireland’s Head of Sales for Republic of Ireland domestic multi-site companies, indigenous MNCs and public sector accounts. He is responsible for the direction and control of all sales activity in the region. He has over 10 years management experience from high growth start-ups to more established businesses. He’s led teams in Ireland, India and China across various industries (ICT, On-Line Recruitment, Corporate Training and International Education).

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