Is Trump Weak On China For Trying To Save Chinese ZTE Jobs?

Is Trump Weak On China For Trying To Save Chinese ZTE Jobs?

U.S. President Donald Trump is on the brink of a trade war with China. Following presidential campaign rants claiming President Xi Jinping’s current communist party manipulates their currency and has stolen American jobs for way too long, he proceeded to slap the country across the face with just over $50 billion in steel and aluminum tariffs.

This, of course, resulted in foreseeable Chinese backlash. After affecting just over 1300 trade products, the foreign government installed a 25 percent increase in tariffs on popular U.S. exports such as pork, aluminum, airplanes, cars and soybeans, the latter being the top U.S. agricultural export to China. They followed this up with another 15 percent tariff increase on more than 120 US imported commodities like almonds, apples, and berries. Now, according to a Sunday morning tweet from the president himself, the U.S. has announced their latest policy reversal: Trump wants to save Chinese jobs. Seriously.

“President Xi of China, and I, are working together to give massive Chinese phone company, ZTE, a way to get back into business, fast. Too many jobs in China lost,” the president tweeted. This is a significant change compared to the company’s treatment from the U.S. Commerce Department, blocking the ZTE telecom giant from receiving parts and services from U.S. companies for violating sanctions against North Korea and Iran.

In a recent report from The Guardian, it’s believed that U.S. officials made the decisions after discovering ZTE, forced to pay an estimated $1.2B fine for “misleading” regulators, gave bonuses to employees involved with the violations. An internal document from the company suggests further U.S. punishments could have forced the expensive smartphone giant to go out of business or drastically change their conduct going forward. President Trump, however, sees this as an opportunity.

While this is a clear reversal on campaign rhetoric, experts suggest the administration seeks to bring China to the table on an agreement that could balance the trade deficit between the two superpower countries.

In early May, China’s official Xinhua News Agency reported on how talks between Trump and Jinping officials “reached a consensus” on minor trade issues while “major disagreements” still affect international relations — the only common ground found being that talks should continue.

Following the second round of trade talks, which took place in Washington last week, the protectionist dealmaker-in-chief isn’t any happier. President Trump then contradicted a Wall Street Journal report suggesting the administration has come to a comprehensive agreement on ZTE, claiming ZTE fines and management changes were to be exchanged for normalized trade relations. The president, however, declared this untrue.

“There is no deal,” the president told reporters. “We’ll see what happens. China has made a fortune. I’m not satisfied but we have a long way to go… what I envision is a very large fine of more than a billion dollars, could be $1.3 billion. I envision a new management, a new board and very, very strict security rules. And I also envision that they will have to buy a big percentage of their parts and equipment from American companies.”

With the U.S. now past their May 1st deadline on tariff exemptions, it’s expected that disagreements could escalate if neither side can agree on what is considered “fair trade.” Trump has said he thinks trade wars are “easy to win” based on U.S. exports to China being less than U.S. imports from China —meaning China’s $375 billion trade deficit gives them less wiggle room to target other countries than the U.S. Until then, however, experts say the U.S. and China both have a lot to lose from this trade ping-pong game, until a deal can finally be resolved.

“The fact that Beijing put soybeans on its list is a signal that China is not going to pull any punches,” Christine McDaniel, who served as senior trade economist in the George W. Bush administration, told Vox earlier this month.

Their report emphasizes that a heated trade war between the superpower nations would cause the price of goods and unemployment to surge in both countries, meaning the president has a lot of pressure to make those deals he ran his campaign boasting about. Making a concession to save ZTE jobs would be a smart move, giving the high stakes June Summit talks between Trump and North Korea’s supreme leader Kim Jong Un more room for comfort.

The Global Times, a hawkish Communist Party-backed Chinese publication, tweeted that “the situation with ZTE is about credibility and nothing more.” The president, going into historic diplomatic events, should keep a calm head in attempts to reach détente with foreign powers who are ready to go to war as much as his own rhetoric suggested. This quest for peace, evidently, will force Trump to restrain his ego and tame the trade hawks of both the left and right, who will have a criticism we all rightly thought to be inconceivable: he’s being weak on China.