White House says ZTE 'significant' China concern

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Why history drives China's tough stance on global trade

Trump stunned congressional Republicans and Democrats when he tweeted that he has talked to President Xi Jinping of China and that he had ordered the Commerce Department to get Chinese phone-maker ZTE "back into business, fast".

"Tariffs are hidden, regressive taxes that will be paid by U.S. businesses and consumers, paradoxically harming U.S. competitiveness", the U.S. Chamber of Commerce, the largest business group in the country, said in its written comments submitted on Friday.

The intensifying trade dispute has rattled financial markets for weeks.

"As Vice Premier Liu He begins talks in Washington, DC, with Treasury Secretary Steven Mnuchin and others, top Trump administration officials say the two sides aren't close to an agreement".

The spat started with U.S. measures against Chinese steel and aluminium imports, which led to Beijing imposing tariffs on 128 different United States products.

But Democratic lawmaker Adam Schiff cautioned against being too soft on the company, saying on Twitter: "Our intelligence agencies have warned that ZTE technology and phones pose a major cyber security threat".

The ZTE case predates the current U.S.

The Wall Street Journal reported Monday that the two countries were in talks about such a potential swap: The U.S. would spare ZTE, and Beijing would drop plans to impose tariffs on U.S. farm products.

The company shut down operations after being hit by a $1.2 billion fine and pleading guilty to knowingly violating USA sanctions laws.

During a Monday address to the National Press Club, Commerce Secretary Wilbur Ross made it clear that the Commerce Department's position on ZTE is "an enforcement action separate from trade". But most of its products rely on core technology supplies from American companies like Qualcomm and Intel.

In short, caution was the word of the day from some of the larger players in the industry, as companies and Washington geared up for the USA government's official hearing on the tariffs.

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Assuring that no one is pulling his strings, the premier said it was his own decision to give the explanatory statement. He said his party wants normal relations with India, but New Delhi keeps misleading the world opinion.

It is no secret that the US has a huge trade deficit with China. "Chinese society must support ZTE", he said (although some needled him for sending the post not from a ZTE smartphone, but an iPhone).

But once you understand that Trump is primarily guided by the twin goals of affirming himself and dominating others, it becomes fairly easy to see what he'll do next.

Last November, China waited until Trump had left Beijing following his first official visit to the country to announce that it would open up its financial sector - a move created to stress it was making reforms on its own terms.

President Donald Trump has threatened tariffs on imports of Chinese goods, and China has threatened to retaliate with duties on USA products, including soybeans and aircraft.

White House economic adviser Larry Kudlow said on Tuesday it was far from certain what steps the USA government would take on China's ZTE Corp, which he characterized as an enforcement, rather than trade, issue.

"The imposition of tariffs on these components will severely disrupt our supply chain and drive our costs up, which in turn will impede growth, raise prices to American consumers, and make us less competitive globally in comparison with our competitors, and particularly those competitors in low-priced markets", the company said. Their proponents can point not only to Asia's main economies as fellow practitioners, but also to a young U.S. However, Trump tells Americans to just "be cool" about it, because it will apparently all work out fine. China counterpunched with tariffs on a range of USA products, including bourbon and blue jeans.

"The U.S. still needs China", he says.

"Beyond appearing to risk American national security, the statement suggests that the administration is not serious about addressing the many economic challenges China presents". The White House is increasingly preoccupied with its efforts to reach a peace deal with North Korea and avoid a trade war with China.

He notes that China has so far been comfortable with importing large quantities of food, energy and other commodities, because buying them on worldwide markets is less costly than self-sufficiency.

The White House said the deficit has triggered the loss of millions of U.S.jobs that are consequently added to the Chinese economy.

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