President Donald Trump on Monday defended his decision to revisit penalties for Chinese company ZTE Corp for flouting U.S. sanctions on trade with Iran, saying the telecom maker is a big buyer for U.S. suppliers.
Trump, known for his fiery rhetoric against Chinese trade practices he says hurt U.S. jobs, faced backlash from both Republican and Democratic lawmakers after he pledged to work with Chinese President Xi Jinping to help ZTE, saying too many jobs in China had been lost.
The company shut its main operations after the Commerce Department banned U.S. companies from selling components to ZTE for seven years after it violated the terms of a settlement deal for illegally shipping goods made with U.S. parts to Iran and North Korea.
“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,” Trump said on Monday.
ZTE paid more than $2.3 billion to 211 U.S. exporters in 2017, a senior ZTE official said on Friday. U.S. companies are estimated to provide 25 percent to 30 percent of components used in ZTE’s smartphones, network gear and other products.
The U.S. Commerce Department is exploring options besides a supplier ban to punish ZTE (000063.SZ) (0763.HK), China’s second-largest telecom maker, Commerce Secretary Wilbur Ross said.
“ZTE did do some inappropriate things … the question is are there alternative remedies to the ones we had originally put forward and that’s the area we will be exploring very, very promptly,” Ross told journalists at the National Press Club in Washington.
ZTE declined comment on Monday. Ross did not provide details about options under consideration.
Washington export control lawyer Doug Jacobson, who represents ZTE suppliers, said Trump’s tweet “gives ZTE light at the end of the tunnel.”
Shares of ZTE suppliers rose after Trump’s pledge. Acacia Communications Inc (ACIA.O), an optical component maker, jumped nearly 9 percent.
