Sunday, May 13, 2018

The fate of ZTE may be in the hands of President Trump

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  • President Trump tweeted today he wants to give embattled smartphone company ZTE “a way to get back into business, fast.”

  • He posted that he is working with China’s president Xi Jinping to help save ZTE.

  • He added that he instructed the U.S. Commerce Department “to get it done!”

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 placed on it by the U.S.

Now, it looks like ZTE found an unexpected, and very powerful, ally: President Donald J. Trump,

In a Twitter post today, President Trump stated he was working with China’s president Xi Jinping to help give ZTE “a way to get back into business, fast.” He added that he felt that t00 many jobs in China had been lost, and that he has instructed the U.S. Commerce Department “to get it done!”

ZTE has 75,000 employees in China.

This post, like many from President Trump, came out of left field, especially since the U.S. government has been highly critical of ZTE’s business practices in the past. In 2012, it was discovered that ZTE shipped smartphones to Iran. However, the company’s phones used hardware and software from the US, which had a trade embargo with Iran.

ZTE agreed to be fined for this violation in 2017, and also agreed to dismiss four of its senior employees, and discipline 35 other staff. However, earlier this year the Commerce Department claimed ZTE had not yet disciplined the 35 other employees, so it put a seven year ban on the company, preventing it from using any hardware or software products based in the US.

ZTE has since stated the U.S. ban was “unfair” and planned to appeal the decision. This new message from President Trump may be the company’s only real hope of staying alive. It’s possible Trump may be using ZTE’s situation as a bargaining chip with China so he can negotiate a new trade deal with the country.

However, other parts of the U.S. government, especially its intelligence agencies, have other issues with ZTE. They feel the company’s phones, along with phones made by Huawei, are a major cyber security threat. U.S. intelligence assesses that both companies could use their phones to spy remotely for the Chinese government (both ZTE and Huawei have denied these claims in the past).

After President’s Trump’s tweet today, U.S. House of Representatives member Adam Schiff, the ranking member of the US House Intelligence Committee, wrote his own Twitter post that pointed out these concerns, claiming that Trump should “care more about our national security than Chinese jobs”.

It would appear that the situation surrounding ZTE just got a lot more interesting, and its likely to take some more twists and turns before it is all over.

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