Donald Trump says flap over Chinese phone company ZTE involves U.S. jobs and sales

David Jackson | USA TODAY

WASHINGTON — As critics hit President Trump for seeking to help a Chinese phone company accused of involvement in cyber espionage against Americans, Trump said Monday the matter also involves U.S. jobs and exports.

"ZTE, the large Chinese phone company, buys a big percentage of individual parts from U.S. companies," Trump tweeted a day after he said he had ordered the Commerce Department to review the sanctions currently being applied to the telecommunications giant.

Trump also said that the fate of sanctions on ZTE also reflect "the larger trade deal we are negotiating with China and my personal relationship" with President Xi Jinping.

While Trump and aides described the ZTE review as part of complex economic and trade negotiations with China, some lawmakers stressed that the Chinese phone company is being sanctioned over cyber spying.

"Any telecomm firm in China can be forced to act as tool of Chinese espionage without any court order or any other review process," tweeted Sen. Marco Rubio, R-Fla. "We are crazy to allow them to operate in U.S. without tighter restrictions."

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

Sen. Charles Schumer of New York, the Senate's top Democrat, said Trump may be backing off his pledge to crack down on Chinese trade practices, including intellectual property theft, "in exchange for buying some goods in the short run. That’s a bad deal if there ever was one.”

In his tweet on Sunday, Trump said that he and President Xi "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!"

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Commerce Secretary Wilbur Ross told reporters that ZTE has been put on a "bad list" that prevents them from receiving "exports of high-tech material." Ross said his department will be looking at "alternative remedies," and "that's the area we will be exploring very, very promptly."

The ZTE matter surfaced as the United States and China negotiate possible new trade rules between them.

Claiming China engages in unfair trade practices, the Trump administration has threatened to put tariffs on Chinese products entering the United States; the Chinese have threatened counter-tariffs on U.S. products, another move in what could be a trade war between the world's largest economies.

The fate of sanctions on ZTE are "part of a very complex relationship between the United States and China that involves economic issues, national security issues, and the like," said White House spokesman Raj Shah. "It's an issue of high concern for China that's been raised with the U.S. government and with our administration at various levels."