Chinese smartphone manufacturer ZTE, the subject of a seven year U.S. export ban, recently said that it had to close up shop because of its inability to source software, components and hardware from the U.S. But the phone and network equipment maker, who the U.S. accused of spying on American citizens and corporations on behalf of the Chinese government, has found an unlikely ally in U.S. president Donald Trump.
Trump, who has taken a hard line on trade and technology issues with Beijing, tweeted on Sunday that he and Chinese leader Xi Jinping "are working together to give massive Chinese phone company, ZTE, a way to get back into business, fast".
ZTE, one of the world's largest telecom equipment makers, suspended its main operations after the U.S. Commerce Department banned American supplies to its business.
President Donald Trump pledged on Sunday to help Chinese phone manufacturer ZTE return to business, days after the company said it would cease "major operating activities" because of the US government's recent trade restrictions. The company said it is working to have the ban modified or reversed.
The announcement by the fourth-largest wireless equipment maker in the country comes amid an escalating trade battle between the US and China. In a statement Wednesday, ZTE said "the major operating activities of the company have ceased".
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"The extent of the impact of the Commerce Department ban on U.S. suppliers was noted by the ZTE official, who was not authorized to speak publicly, as Chinese and USA government officials discuss a Washington visit next week by China's top economic [envoy Liu He for the second round of trade talks]".
Problems started to pile up for ZTE as soon as the U.S. ruling highlighted how the company had violated a sanctions settlement involving illegal exports to Iran.
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.
Companies in the United States are estimated to provide up to 30% of the components used in ZTE's products, which includes smartphones and complex equipment for telecommunications networks. By cutting off access to U.S. suppliers of essential components such as microchips, the ban threatens ZTE's existence, the company has said.
Beijing has made ZTE a priority in its negotiations with the US.
The Trump administration also barred ZTE and fellow telecom equipment maker Huawei from selling goods on USA military bases and is considering a broader crackdown on the pair's sales into the US. ZTE provides services for 100 million users in India, 300 million users in Indonesia, and 29 million users in Italy, the official said.