Trump Says ZTE Hasn’t Yet Received Reprieve Amid Trade Talks

(Bloomberg) — President Donald Trump said the U.S. hasn’t yet taken any action to ease penalties on Chinese telecommunications manufacturer ZTE Corp (HK:).

“Nothing has happened with ZTE except as it pertains to the larger trade deal,” Trump said in a series of tweets Wednesday.

“We have not seen China’s demands yet, which should be few in that previous U.S. Administrations have done so poorly in negotiating,” Trump said. “China has seen our demands.”

Chinese Vice Premier Liu He — who is Xi’s top aide for economic matters — arrived in Washington this week for talks with the Trump administration on ways to resolve the trade dispute between the two countries.

Liu will spend four days in the U.S. for trade talks with Treasury Secretary Steven Mnuchin, his second visit this year. An earlier round of talks this month in Beijing ended in discord.

“There has been no folding as the media would love people to believe, the meetings haven’t even started yet!” he added.

Trump shocked many in Washington with a tweet Sunday that he was working with Chinese President Xi Jinping to give ZTE “a way to get back into business, fast.” Trump said “too many jobs in China” had been lost and that his Commerce Department “has been instructed to get it done!”

The announcement from Trump drew swift condemnation from both Republican and Democratic lawmakers. It was an abrupt shift from the campaign Trump has mounted against Chinese technology companies, which he regularly accuses of stealing American intellectual property and exploiting unfair trade rules.

The Commerce Department cut off ZTE from U.S. suppliers last month, saying it violated a 2017 sanctions settlement related to trading with Iran and North Korea and then lied about the violations.

Commerce Secretary Wilbur Ross told reporters Monday at the National Press Club in Washington that the department is now considering “alternative remedies” for ZTE’s sanctions violations and will seek to resolve the issue “very, very promptly.”

At a House hearing Wednesday, Republican Representative Leonard Lance, of New Jersey, said he was “concerned about the national security implications of lessening the punishments against ZTE in a trade deal with China.”

“National security and the security of our networks are primary concerns here, and the administration must consider that above all else in dealing with China,” Lance said at the hearing on telecommunications and national security.

Representative Frank Pallone, of New Jersey, said cheaper Chinese equipment “may be the only option” for many U.S. companies building fast 5G networks. Pallone, the top Democrat on the Commerce Committee, called for more hearings by Congress and said the Trump administration hadn’t presented a coherent plan.

(Updates with comments from lawmakers in 11th paragraph.)

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