Published: Fri, May 25, 2018
Worldwide | By Isabel Fisher

ZTE could face fresh US$1.3b fine, Trump says

ZTE could face fresh US$1.3b fine, Trump says

Trump has already met President Xi of China for trade talks but has been characteristically unsatisfied with the results. Chinese Vice Premier Liu He was involved in the talks in Beijing as well as later talks in Washington, DC.

The Chinese Embassy in Washington did not return a request for comment on Mr Mnuchin's statement.

Over the weekend, both pledged to keep talking about how China could import more energy and farm commodities from the United States so as to narrow the $335-billion annual trade deficit in USA goods and services with China, although details and a firm timeline were thin. ZTE's fate remains unknown as of now. "Commerce Department has been instructed to get it done!" This is not a far-fetched assumption, since it was the reason administration officials gave last week after the original announcement of the US-China detente.

Trump's handling of the ZTE issue clearly reveals his taste for staged about-turns. In April, the Commerce Department cut off Chinese telecommunications company ZTE Corp. from its American suppliers in response to what Commerce Secretary Wilbur Ross called "egregious" violations of US sanctions against doing business in Iran and North Korea. It has also been reported that ZTE may be required to increase the quantity of hardware it buys from American companies.

The objective of the ZTE denial order could simply have been to demonstrate the might of the U.S. government and the power of USA sanctions. In targeting ZTE, the U.S. discovered a weapon whose potency it was probably not aware of, and now it also has Huawei in its crosshairs, and this is something that is giving Beijing sleepless nights. In the auto industry, for example, foreign companies must form joint ventures with local partners (often state-owned enterprises) in order to manufacture and sell vehicles in China, or else their vehicles will be subject to an import tax.

Both sides are aiming for something more than just trade.

Washington and Beijing stepped back from the brink of full-blown trade war after talks last week, with the United States appearing to set aside for now its demands that China revamp key planks of its industrial policy in exchange for buying more farm products. "We have a long way to go", he said. The countries announced at least a temporary trade truce and dropped their tariff threats on Saturday after setting up a framework for addressing trade imbalances. Maybe. Are they committing to lowering their tariffs on American cars? After all, dollars don't fall from the sky, and Chinese people have to acquire them one way or another before they can spend them.

He has specifically targeted Germany, and argued that American cars are slapped with higher tariffs than those imposed on European autos. He made clear that the "unfair and illegal trading practices, intellectual property theft, [and] forced technology transfers" of China.

Cisco CEO Chuck Robbins on China, investing in technology, repatriation, the company's growth and acquisition strategy.

But that shutdown would cost American jobs as well, he continued.

The Europeans, too, are waking up to the challenge though somewhat late.

Trump's comments come one day after he said he was "not satisfied" with the trade talks that have become stressed on the United States side by an apparent lack of coordination among administration officials. It could be US$1.3 billion.

Economic reform is, therefore, vital for China, and the process is finally underway following Xi's consolidation of authority. "I think there was a little change in attitude from Kim Jong Un", Trump said in the Oval Office.

"We have a very powerful hand on trade".

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