Donald Trump pledges to help rescue Chinese telecoms giant ZTE

Eileen GuzmanMay 14, 2018

ZTE, one of China's leading technology companies, has announced it will end "major operations", after the US government barred American firms from doing business with the telecom equipment maker.

The president said he is working with Chinese President Xi Jinping and the U.S Commerce Department, which "has been instructed to get it done".

The ZTE shutdown highlights the global ramifications of Trump's trade battle with China.

The news came less than a month after the US Commerce Department banned ZTE from buying US-made components, such as semiconductors, for seven years, effectively wrecking its supply chain.

Trump announced on Twitter he is working with the Chinese government and ordered the U.S. Department of Commerce to find a way to help the company continue to operate after a U.S. trade ban imposed last month that's cut into its revenue.

ZTE paid over $100 million each to Qualcomm Inc, Broadcom Inc, Intel Corp and Texas Instruments, the official said.

Trump's reassurance comes as the USA and China - the world's two largest economies - have hit each other with tariffs in an escalating trade battle.

"Major operating activities of the company have ceased" as a result of the USA decision, it said in a filing Wednesday.

The company recently said that it would cease "major operating activities" because of the USA government's recent trade restrictions.

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

ZTE did not immediately respond to a request for comment.

The ban on U.S. sales to the firm arose from its skirting of United States export controls by selling to banned countries like North Korea and Iran with employees documenting how to evade American oversight.

Beijing has been closely following the developments around ZTE, a company with 80,000 employees and which is headquartered in southern China. ZTE misled the Department of Commerce. Later, he slapped tariffs on $50 billion worth of Chinese goods. More recently, reports have suggested that the Trump administration is considering various ways to limit Chinese firms' ability to invest in the US.

ZTE's troubles with the USA government are also playing out amid broader fears of an ascendant Chinese tech industry.

Trump's offer for aid comes at a moment of sky-high trade tensions between the United States and China.

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