A recent tweet from US President Donald Trump suggests he might be open to reversing his trade policy with China. The two economies have experienced tensions lately that some fear may spark a trade war. Trump's reversal may include removing sanctions against Chinese telecom giant ZTE in a larger effort to protect US farmers and agriculture.
Although details are sparse and the deal may not advance, the negotiation included removing sanctions on ZTE. In return, the Chinese government reportedly would not impose tariffs on US agricultural products, which covered a wide variety of goods, including pork, apples, and wine. China instituted these tariffs only in response to Trump's steel and aluminum tariffs.
In addition to tariff relief, the Chinese may also make it easier for other US agricultural products to enter the country as well.
ZTE is a Shenzhen-based telecommunication-equipment producer that makes inexpensive smartphones and relies so much on components shipped from the US that many feared the company would go under in the wake of Trump's tariffs.
Earlier in 2017, the US Commerce Department hit ZTE with sanctions after they did business in Iran and North Korea, a violation of US rules. ZTE was not allowed access to US-made parts for its phones and equipment, hurting the company's operations and nearly put them out of business.
Given ZTE's importance to the Chinese economy, China sought to convince the Trump administration to reverse the move, prompting Trump to leverage any move with an ease in trade with the US. Chinese economic advisor Liu He told US negotiators that there is no chance of a deal without the United States removing the seven-year ban on ZTE.
According to The Wall Street Journal, on Sunday, President Donald Trump said in a tweet that he was working with Chinese President Xi Jinping to get ZTE "a way to get back into business, fast," as there had been "too many jobs in China lost." Trump said the Commerce Department has been instructed to "get it done!"
The comment marked a sharp shift for Trump, who has long accused China of stealing US jobs and made the claim that the US was "being weak with China" a central focus of his campaign. The US Treasury and Commerce departments had been strongly aligned against ZTE as recently as several days ago in one of the toughest actions to date against a Chinese company.
Several members of the Trump administration have criticized the deal as "outrageous" and claiming that any future deal means "giving up on punishing ZTE for the Chinese restoring the trade status quo."
Both China and the US are showing a potential willingness to negotiate that is only expected to continue as Liu He traveled to the US to meet with Trump to talk trade.