Washington seeks “alternative remedies” against ZTE as US-China trade talks begin

World Today

Liu He Liu He is a close friend and economic adviser to Chinese President Xi Jinping. © Reuters

Beijing’s top trade negotiator, Vice Premier Liu He, comes to Washington this week to continue talks to calm tensions. Beijing says he’ll be in Washington for meetings May 15-19. The announcement of Liu He’s trip comes after U.S. President Donald Trump ordered his commerce department to reduce its penalties on ZTE in a Sunday tweet.

Jessica Stone has more.

In April, Washington levied a seven-year ban on ZTE doing business with US suppliers as punishment for the Chinese telecommunications company flouting US sanctions on Iran and the Democratic People’s Republic of Korea. Last week, ZTE said it was stopping major operations – endangering as many as 80,000 Chinese jobs – because it can’t buy components from U.S. suppliers. American companies provide an estimated 25-30 percent of ZTE components in cell phones and telecommunications networks, so Washington’s move risks thousands of American jobs, too.

“We appreciate the positive statements made by the US side on the issue of ZTE. We are currently working with the US side on specific details,” said Liu Kang, Chinese Ministry of Foreign Affairs spokesperson.

U.S. Commerce Secretary Wilbur Ross responded to Trump’s tweet on Monday: “The question is are there alternative remedies to the one that we had originally put forward. And these are the areas we will be exploring very, very promptly.”

A possible option on the table: Beijing reduces proposed tariffs on U.S. farm goods, like pork and soybeans,in exchange for a lighter penalty on ZTE. In remarks at the National Press Club in Washington, D.C. Ross indicated ZTE’s fate would be part of this week’s trade talks.

“Obviously, this is part of a very complex relationship between the United States and China,” said White House Spokesperson, Raj Shah. “It’s an issue of high concern for China that’s been raised with the U.S. government and our administration at various levels,”

Indeed, President Trump tweeted Monday that he’s looking for a “larger trade deal” with China, and hopes his “personal relationship” with Chinese President Xi Jinping will influence that process.

If no agreement can be reached, however, Ross made it clear that Washington does not fear a trade war.

“A trade tit-for-tat will not be economically life threatening for the United States,” he said.