Trump says U.S. will help penalized Chinese company, ZTE Corp

A salesperson stands at counters selling mobile phones produced by ZTE Corp. at an appliance store in Wuhan in central China's Hubei province in a file

A salesperson stands at counters selling mobile phones produced by ZTE Corp. at an appliance store in Wuhan in central China's Hubei province in a file

Trump wrote on Twitter on Sunday, saying he is working with Chinese President Xi Jinping on a solution.

The Trump administration punished Chinese tech company ZTE for illegal practices, but on Sunday, President Donald Trump said he's going to work to help ZTE because of "too many jobs in China lost". The export ban was placed on ZTE after the company violated USA sanctions and sold goods and services to Iran and North Korea.

The U.S. government accused ZTE of violating a March 2017 settlement in which the firm pleaded guilty and agreed to pay $1.19 billion for illegally shipping telecommunications equipment to Iran and North Korea. And the Federal Communications Commission recently moved toward prohibiting U.S. Internet providers that receive federal funds from spending them on equipment made by companies such as Huawei, another major Chinese telecom player.

Trump's tweet confirms high level concerns on both sides of the Pacific over the effect the trade ban will have on ZTE and its employees.

Trump's offer for aid comes at a moment of sky-high trade tensions between the United States and China.

But ZTE still relies on USA companies to supply it with components for its networking gear. "This egregious behavior can not be ignored, " Commerce Secretary Wilbur Ross said in April.

Chinese officials raised objections to the penalties on ZTE when a USA negotiating team visited Beijing earlier this month.

Another Chinese manufacturer, Huawei, is also under fire in the US.

At the Beijing talks, the Trump administration handed China a list of hard-line demands that trade experts said could make it even more hard to resolve the trade disputes.

ZTE's current struggles have made it the most visible outcome thus far of a brewing trade war between the United States and China. It's also the fourth largest provider of smartphones in the United States.

The telecom firm said it had shut down "the major operating activities of the company".

Other experts said Trump's policy reversal was unprecedented.

"This is a fascinating development in a highly unusual case that has gone from a sanctions and export control case to a geopolitical one", said Washington lawyer Douglas Jacobson, who represents some of ZTE's suppliers.

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