It’s uncertain whether telecom equipment maker ZTE will be a winner or loser in the U.S. government’s ongoing trade discussions with China. The company has been caught in the back-and-forth negotiations and tweets from President Trump that have made it difficult to follow.
On Friday President Trump posted a series of tweets announcing a deal in which he said he would allow ZTE to “reopen with high level security guarantees and changes of ZTE’s management and board.” Trump tweeted that the deal also would require the company to purchase components from the U.S. and pay a $1.3 billion fine for engaging in illegal sales of equipment to Iran and for failing to fire employees who brokered those illegal sales.
But this morning, ZTE’s fate may have shifted once again as part of larger trade war negotiations. The White House issued a statement announcing that it will proceed with its plans to impose 25 percent tariffs on $50 billion of imported Chinese goods. In addition, it said that the U.S. will restrict investments and enhance export controls on goods from China. Those controls will be announced by June 30 and implemented shortly after.
This latest statement comes less than 10 days after Treasury Secretary Steve Mnuchin said that trade wars with China were on hold.
The Washington Post reported that the current trade restrictions announced by the White House are in response to criticism over Trump appearing “soft” on ZTE when he tweeted about lowering the penalties the company was facing.
In the meantime, ZTE is apparently sidelining some of its executives amid these ongoing negotiations between the U.S. and China. According to Politico, citing unidentified sources, ZTE’s CTO Xu Huijun and Huang Dabin, who oversees corporate operations, are no longer performing their usual duties at the company. ZTE replaced its long-time chief compliance officer and legal officer in March in the wake of the U.S. Commerce Department’s seven-year ban on American companies doing business with ZTE.