Trump Extends Lifeline to Sanctioned Tech Company ZTE

US authorities have banned firms from selling parts to China's ZTE for seven yearsMore

ZTE, one of China's leading technology companies, has announced it will end "major operations", after the US government barred American firms from doing business with the telecom equipment maker.

Jobs in China are at risk, he said.

ZTE was also handed a seven-year suspended denial of export privileges, which the commerce department made a decision to activate last month after determining the company had lied about its handling of the matter.

US President Donald Trump has told the US Commerce Department to get ZTE Corp., the massive Chinese telecom equipment maker, back into business after denying the company export privileges in April in a withering statement on ZTE's "egregious" behaviour. Too many jobs in China lost. "Commerce Department has been instructed to get it done", Donald Trump wrote on Twitter.

Spokesmen for the Commerce Department and ZTE weren't immediately available for comment.

The trade troubles threaten a technology sector that is increasingly intertwined with major players in the United States and China. More recently, reports have suggested that the Trump administration is considering various ways to limit Chinese firms' ability to invest in the US.

ZTE is not among Qualcomm's publicly disclosed largest customers, which include Apple Inc, Samsung Electronics Co Ltd and Chinese smartphone makers Oppo and Vivo.

It's highly unusual for a president to personally intervene in a regulatory matter and could undercut the leverage of Treasury and Commerce officials seeking to enforce sanctions and trade rules.

The order followed $1.2bn (£900m) of fines against the company a year ago after it was found to have breached trade embargoes against Iran and North Korea by buying components from USA firms, packaging them together into its equipment and selling them on to the ostracised countries.

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Beijing has closely followed the developments around ZTE, a company with 80,000 employees headquartered in southern China.

Last week, the company said that its earnings have surged, reporting a 39 percent jump in net income for the first quarter.

"ZTE made false statements to the U.S. Government when they were originally caught and put on the Entity List, made false statements during the reprieve it was given, and made false statements again during its probation".

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.

"As a result of the (US-imposed) Denial Order, the major operating activities of the company have ceased", ZTE said in regulatory filings late on Wednesday. During the campaign, Trump blasted China for what he alleged was a pattern of cheating through currency devaluation and other measures to steal American jobs and hurt US workers. And a looming trade war between the United States and China has been punctuated by both nations threatening billions of dollars worth of tariffs against the other.

But Trump said he was optimistic about the future of the countries' trade relations.

He returned to the topic more than five hours later by blasting past trade agreements between the two countries.

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