Trump Accused of Hypocrisy Over ZTE Tweet
President Donald Trump announced on Twitter that he has instructed the US Commerce Department to help sanctioned Chinese telecom company ZTE “back into business” despite previously taking a hard line approach to Chinese trade negotiations.
President Donald Trump, who has traditionally maintained a strong stance in regard to trade and technology issues with China, has evidently had a change of heart. At the weekend, the US President tweeted that he was working with China’s President Xi Jinping to find a way to get the telecoms giant ZTE “back into business,” saying too many jobs had been lost. He closed his tweet by adding, “Commerce Department has been instructed to get it done.”
President Xi of China, and I, are working together to give massive Chinese phone company, ZTE, a way to get back into business, fast. Too many jobs in China lost. Commerce Department has been instructed to get it done!
— Donald J. Trump (@realDonaldTrump) May 13, 2018
A few hours later he appeared to backpedal by posting a tweet emphasising that China had historically taken advantage of past trading negotiations with the US. Concluding his tweet, he reassuringly added, “But be cool, it will all work out!”
China and the United States are working well together on trade, but past negotiations have been so one sided in favor of China, for so many years, that it is hard for them to make a deal that benefits both countries. But be cool, it will all work out!
— Donald J. Trump (@realDonaldTrump) May 13, 2018
China’s Foreign Ministry Spokesperson Lu Kang, said of the move: “We greatly appreciate the positive position of the US on the ZTE issue and are in close communication with the US on the details of the issue.” Chinese ZTE employees reposted the tweet widely on social media, expressing relief and joy at its sentiment. A ZTE manager posted on her WeChat account, “Wow! Breaking good news! Commerce Department has been instructed to get it done.”
Social Media Backlash
Since Trump had based his campaign for election on the promise he would prioritise US interests and jobs, many took to social media platforms to voice their anger at him. Trump responded on Twitter to defend his stance saying that ZTE bought lots of it components from US companies, therefore it was in America’s interest to throw ZTE a life-line. He also mentioned Xi and trade negotiations to reassure his supporters he was working to get a better trade deal for the US.
ZTE, the large Chinese phone company, buys a big percentage of individual parts from U.S. companies. This is also reflective of the larger trade deal we are negotiating with China and my personal relationship with President Xi.
— Donald J. Trump (@realDonaldTrump) May 14, 2018
ZTE Found to Violate US Sanctions
To put this tweet in context, last month the US Commerce Department imposed a seven-year ban on ZTE after it was found to have violated US sanctions by selling equipment to Iran and North Korea. At the time of the ban, the Commerce Department said that ZTE was engaged in an extensive conspiracy, approved by its then CEO to evade US laws.
Initially, ZTE was fined $1.19 billion by the US and the company was told it also had to discipline those involved in the scandal. However, when it came to light that ZTE had not disciplined the wrong-doers and had in fact rewarded employees involved in the conspiracy with bonuses, the US then imposed the ban. Furthermore, American Intelligence agencies have accused the firm of using its phones to spy on American citizens.
The ban prohibits US companies from supplying the firm with parts and service contracts. It would appear that Trump is trying to strengthen his ties with Xi Jinping, who will be a key player at an upcoming summit with North Korea.
Trump’s volte-face comes at an odd time as he recently pulled the US out of the Iran nuclear agreement and vowed to re-impose sanctions on Iran – As well as possible secondary sanctions on companies that do business with the regime. He has even threatened sanctions against European companies that continue to trade with Iran and is now publically supporting a company which has been proven to have broken US sanctions by trading equipment using US components to Iran.
Trump’s critics and many Twitter users were unimpressed with his tweet, asking why he was not prioritising US companies instead. During his campaign for the presidency he was very vocal about bringing jobs back from China to the US. Previously he has said, “I’m angry when China is making 500,000 billion dollars a year when they are sucking our money and jobs out of our country.” At another event during his campaign, he said: “We cannot allow China to continue to rape our country and that’s what they’re doing.”
No Legal Mechanism for This
At the moment, Trump’s plans for ZTE remain murky at best and can only be speculated about. However, it may come to nothing and it would not be the first time that the President, an avid tweeter, has floated possible policies online but later failed to follow through on. What is quite concerning and unusual is that the President is threatening to overrule the Commerce Department’s judgement.
Lawyer Douglas Jacobson, who represents some of ZTE’s US 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. There’s no legal mechanism for this. How this will play out remains to be seen. They are not simply going to be able to resume business as usual.”