Trump's trade fight with China just claimed its first big victim

Trump's trade fight with China just claimed its first big victim

"President Xi of China, and I, are working together to give massive Chinese phone company, ZTE, a way to get back into business, fast, " Trump tweeted.

He said that the Commerce Department, the USA authority which has imposed the seven-year ban, had been told to "get it done".

The announcement seemed to directly contradict the policy of the Department of Commerce, which in April imposed a seven-year ban on sales of components to ZTE in connection with the company's violation of US sanctions on Iran.

The ban is the result of ZTE's failure to comply with that agreement, the Commerce Department said.

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The announcement by the fourth-largest wireless equipment maker in the country comes amid an escalating trade battle between the USA and China. In a stark announcement earlier this week, the Chinese telecom giant confirmed it was shutting down "major operating activities".

United States officials imposed the seven-year ban last month after ZTE allegedly made false statements regarding its settlement of a case involving the illegal sale of goods to Iran and North Korea.

"The extent of the impact of the Commerce Department ban on United States suppliers was noted by the ZTE official, who was not authorized to speak publicly, as Chinese and U.S. government officials discuss a Washington visit next week by China's top economic [envoy Liu He for the second round of trade talks]".

Beijing has been closely following the developments around ZTE, a company with 80,000 employees and which is headquartered in southern China.

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"We are concerned that if ZTE is not ultimately punished for its reported misconduct, American export control laws and worldwide efforts to promote human rights in Iran will be weakened", according to the letter, which was signed by Pompeo, Zinke and 21 other Republican House members.

Last week, the company said that its earnings have surged, reporting a 39 percent jump in net income for the first quarter.

Spokesmen for Zinke and Pompeo didn't immediately respond to a request for comment sent outside normal business hours. Last week, Telstra said it would stop sales of ZTE smartphones, though it indicated it was "hopeful that ZTE will be able to reach a resolution to this matter soon so that we can recommence selling Telstra-branded ZTE devices".

Beijing has made ZTE a priority in its negotiations with the US.

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