Looking at sanctions against ZTE


Their reaction could complicate Mr Trump's efforts to win concessions from China that would narrow a $US335 billion annual trade gap.

"China unswervingly defends its core interests, and did not make any promise on cutting its trade surplus with the U.S.by a specific figure", Gao Feng, spokesman at the Chinese commerce ministry, said on Thursday.

"In the face of Washington's unreasonable pre-conditions in earlier consultations, Beijing had always returned with resolute responses and had never backed down", one commentary on China's official media Xinhua read.

The administration has already signaled a willingness to relax penalties on Chinese smartphone maker ZTE, which was caught violating worldwide sanctions on Iran, in exchange for Beijing agreeing to purchase more American agricultural products. ZTE's fate remains unknown as of now. The U.S. leader said, "Commerce Department has been instructed to get it done!"

In its statement announcing the inquiry, the Commerce Department cited figures showing that U.S. employment in automobile manufacturing had dropped by 22 percent from 1990 to 2017. Within the administration, divisions are raw between free-trade supporters such as Mnuchin and White House economic adviser Larry Kudlow and China hawks led by White House trade adviser Peter Navarro. He referenced the president's requirement that trade issues with China must change.

Trump's handling of the ZTE issue clearly reveals his taste for staged about-turns.

The Commerce Department slapped sanctions on ZTE after determining the company sold goods containing U.S. parts into Iran and North Korea, a violation of United States sanctions against those two countries.

Trump also noted that ZTE buys most of its parts from American companies, meaning those firms get caught in the crossfire and lose business.

The Commerce Department's review of penalties against ZTE Corp. for the violations will bear in mind any threats to American security, Mnuchin said Tuesday during a hearing before a Senate Appropriations subcommittee in Washington. In targeting ZTE, the USA discovered a weapon whose potency it was probably not aware of, and now it also has Huawei in its crosshairs, and this is something that is giving Beijing sleepless nights. China's announcement by Beijing that it will allow foreign new-energy vehicle makers to fully own auto factories as early as this year removed the primary hurdle in the way of founder and billionaire Elon Musk.

Trump: ZTE exemption is a 'favor' to Chinese leader

Both sides are aiming for something more than just trade.

"I think we need to be much more resolute and focused in dealing with China", the Connecticut Democrat said. "We have a long way to go", he said. The Pentagon has already banned ZTE products from being sold on American military bases. After all, dollars don't fall from the sky, and Chinese people have to acquire them one way or another before they can spend them.

Now suppose that in 2019 China reduces some tariffs it has against exports from America. It hasn't been an aggressive acquirer of U.S. technology companies.

The US has been conscious of the Chinese strategy of technology acquisition.

But while American officials played a good cop-bad cop routine and continued to debate amongst themselves, the Chinese media claimed victory.

The Europeans, too, are waking up to the challenge though somewhat late.

Now the conflict has Mr Trump taking fire at home from two sides: those anxious he is provoking a damaging trade fight, and those who fear he will give in too easily.

Passenger cars make up around 30 percent of Japan's total exports to the United States and Tokyo has already threatened Washington with retaliation at the World Trade Organization for the steel tariffs. There is more leverage is to be had by effectively shaping the Chinese reforms rather than creating conditions that could prevent them from taking place.