Victor Dill May 17, 2018
The Reason For Trump's 'U Turn' On China's Telecom

President Trump certainly set tongues wagging with his tweet on Sunday where he expressed concern over loss of jobs in China when Chinese telecom giant, ZTE announced the closing down of most of its operations. ZTE is a known figure in the global telecom sector standing in the fourth place in the U.S. smartphone market, sourcing its raw materials from several American companies like Qualcomm, Alphabet and Intel. The problem arose when ZTE sold its products which incorporated American technology to Iran and North Korea in spite of sanctions imposed on them by the US. Though $1.2 billion was decided as the amount that would be paid by ZTE, the U.S. Treasury and Commerce Departments imposed a seven year trade embargo after learning that the Chinese company had monetarily appreciated its officials responsible for selling products to the banned nations instead of meting out punishment to them.

Against this backdrop, President’s Trump’s tweet was bound to create ripples in the American economy. However, this brings to the fore certain larger issues ahead of the trade talks scheduled between the two nations. President Trump is using the ZTE factor as a bargaining chip to obtain several trade concessions for his country with regard to agricultural exports and prerequisites for accessing the Chinese markets.

President Trump seems to have had a change of heart in meting out such a harsh punishment that was politically motivated for a trade related offence. One of the reasons for it was that the trade embargo on ZTE would ultimately rebound on the American economy as tech jobs in the country too would be affected on a massive scale.

President Trump’s tweet indicated his willingness to compromise on the embargo but for concessions in the bargain. With the trade talks slated to be held in the coming days it waits to be seen whether the looming threat of an economically destructive trade war recedes or deepens.

Victor Dill

Before turning out to be a full-time writer and editor, James Tidwell was a blogger who wrote his outlooks and viewpoints relating to Entertainment and Sports. Owing to his interest and absolute fineness of playing with world beautifully, he was appointed to dabble in Entertainment and Sports world.

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