U.S. will help China's ZTE 'get back into business'

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

U.S. will help China's ZTE 'get back into business'

President Donald Trump says he now wants to help save the beleaguered handset maker, tweeting Sunday that he wanted to give the company "a way to get back into business, fast".

A May 1 formal request by ZTE to the US Commerce Department for an immediate stay of the April 15 ban went unheeded, according to a person familiar with the matter.

Despite the offer to help ZTE, trade tensions between the USA and China remain sky high.

Meanwhile, ZTE, which relies on US firms for key smartphone components, including microchips from Qualcomm and glass from Corning, has said the USA export ban is a massive disruption to its business and ZTE Chairman Yin Yimin called it unfair and unacceptable. The company said it is working to have the ban modified or reversed.

The extent of the impact of the Commerce Department ban on USA suppliers was noted by the ZTE official, who was not authorised to speak publicly, as Chinese and U.S. government officials discuss a Washington visit next week by China's top economic official.

President Donald Trump on Sunday expressed confidence that the US and China would be able to get over their differences on trade, saying that both governments are "working well together" on the issue.

Given that US sanctions were imposed on ZTE due to threats to national security and its violation of trade sanctions with Iran and North Korea, Trump's desire to give the company another chance in the U.S.is truly unexpected.

He said that the Commerce Department, the U.S. authority which has imposed the seven-year ban, had been told to "get it done".

Similar concerns exist in Australia about Chinese equipment makers, although Fairfax reported today that ZTE is on the shortlist for two Australian telecommunications projects, including Telstra's 5G network and Perth's metropolitan rail comms system.

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Ordering a denial may have been the Commerce Department's idea of playing hardball to force compliance.

The US action could be devastating to ZTE.

The ban has also impacted telcos at a resale level.

The ban also hurts ZTE's ability to provide services, such as repairs to infrastructure, to customers in other countries and regions in which it operates.

And Chinese officials protested against the ban in discussions with a high-level United States delegation last week and said the U.S. side would discuss the matter with President Donald Trump.

Experts said Trump's policy reversal was unprecedented.

Douglas Jacobson, a lawyer in Washington DC who represents some of ZTE's suppliers, said: "This is a fascinating development in a highly unusual case that has gone from a sanctions and export control case to a geopolitical one". How this will play out remains to be seen.

ZTE suppliers including Acacia, Oclaro, Lumentum Holdings, Finisar, Inphi and Fabrinet, all fell sharply after the ban was announced.

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