Trump offers reassurance over China tensions: 'Be cool'

US Bans American Companies From Selling to China's ZTE

Trump offers reassurance over China tensions: 'Be cool'

"Too many jobs in China lost".

The biggest blow to ZTE came last month, however, when the U.S. Department of Commerce, citing the company's failure to fulfill its plea deal and discipline the employees who sold components to Iran and North Korea, banned the sale of U.S. -made parts to the company for a period of seven years.

The president said he is working with Chinese President Xi Jinping and the U.S Commerce Department, which "has been instructed to get it done". Trump wrote in a tweet Sunday.

Those actions led to a US$1.2 billion fine a year ago, with the current export ban imposed in April after ZTE allegedly failed to live up to its agreement, lying about the punishment of employees involved in the sanctions skirting.

The trade troubles threaten a technology sector that is increasingly intertwined with major players in the United States and China.

A USA blockade has choked off the revenue of the No. 2 Chinese telecom company, which regards the next two weeks as crucial as it faces potential collapse.

Granting a reprieve to ZTE - a firm with over 70,000 employees, over $17 billion in annual revenue and close ties to the government - doesn't fit with the strategy to hurt China, but then Trump's administration is hardly by the book and often times seemingly pragmatic.

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ZTE pleaded guilty past year to conspiring to violate US sanctions by illegally shipping USA goods and technology to Iran and entered into an agreement with the US government.

It looks like ZTE may get a reprieve. The company warned in April, when the ban was first implemented, that it would "severely impact the survival and development" of ZTE.

"It's going to disrupt procurement, supply lines, it will affect a lot of companies in various ways", said one technology industry executive who asked to remain anonymous.

Congress has long seen ZTE and other Chinese telecommunications firms as a possible threat to national cybersecurity because their devices have the potential to allow surveillance by China's government.

Increasing reliance on Chinese telecom equipment would give Beijing an edge in global surveillance and intelligence, he said. By cutting off access to US suppliers of essential components such as microchips, the ban threatens ZTE's existence, the company has said. "You should care more about our national security than Chinese jobs".

It "goes against the steady stream of security warnings about ZTE", he added. 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. He has often cast the country's business practices as a threat to the American workforce, and announced in March his administration would impose $50 billion worth of tariffs on imported Chinese goods to combat what he described as "unfair" trade practices by China.

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