In about-face on trade, Trump vows to protect ZTE jobs in China

SHANGHAI — As China and the United States go toe-to-toe on trade and maneuver ahead of a historic North Korea meeting next month, an unlikely obstacle has emerged: a second-tier Chinese electronics maker, ZTE.

The company said last week that it had halted "major operating activities" after being penalized by the U.S. Department of Commerce. On Sunday morning, President Donald Trump surprised many in Washington when he indicated a willingness to rethink the punishment. In doing so, he also appeared to walk back from brinkmanship that has threatened the United States' trade talks with China.

In a tweet, Trump said he was working with his Chinese counterpart, Xi Jinping, to prevent the collapse of the company, which employs 75,000 people.

"Too many jobs in China lost," Trump wrote. "Commerce Department has been instructed to get it done!"

The overture appeared to be off key for an administration that has been reliably strident on what it has called unfair Chinese trade practices. Trump's concern in his tweet about Chinese jobs — which echoed Beijing's talking point on the issue — also runs counter to his vows to restore U.S. jobs lost to China.

Still, by saying the United States would work to bring ZTE back to life, Trump took pressure off the U.S.-Chinese relationship at a crucial moment. Trump's meeting with the North Korean leader Kim Jong Un has been scheduled for next month and will hinge on China, which has fashioned itself as an intermediary with Kim.

And after weeks of trade threats, U.S. and Chinese officials have been making the 14-hour flights back and forth in an attempt to negotiate their way out of a looming trade war.

Liu He, a top economic adviser to Xi, is due to visit Washington this week to follow up on discussions.

Yet if ZTE's resuscitation reduces trade tensions, it also outlines the intractable nature of a deepening technological cold war between the world's two largest economies.

America's ability to put the company down simply by freezing its access to components made in the United States is a stark sign of what Beijing views as its overreliance on U.S. technology.


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