It must have seemed very odd to President Donald Trump’s supporters when he tweeted on Sunday that he was working hard to save jobs in China.
“President Xi of China, and I, are working together to give massive Chinese phone company, ZTE, a way to get back into business, fast,” he thumbed. “Too many jobs in China lost. Commerce Department has been instructed to get it done!”
This from the sworn defender of American jobs. The man who has repeatedly said that China steals U.S. jobs and technology. Who is threatening the country with US$150-billion in tariffs. Who vowed in a 2016 campaign speech that he would not allow China to continue to “rape our country.”
If Mr. Trump’s concern for Chinese workers seems suspect, it’s because it is. His offer to save ZTE from collapse is a complex tale that provides a vivid picture of the President’s troubling attitude toward trade and foreign affairs.
ZTE is one of China’s biggest smartphone manufacturers and telecommunications companies. It is owned by the Chinese state through several other state-controlled firms. As such, it is considered a security risk and isn’t allowed to do business with U.S. government departments.
It has also been caught selling U.S. technology to embargoed countries, including Iran, North Korea and Syria. In 2016, the U.S. banned the company from buying the American technology that lies at the heart of its products, effectively putting it out of business.
ZTE won a reprieve, though, when it paid a US$1.2-billion fine and promised to punish the employees behind the illegal sales. The U.S. subsequently learned the company didn’t carry out all the punishments – in fact, it gave bonuses to some of the employees involved.
So, last month, Mr. Trump’s administration once again turned off the tap on U.S. components. The company has since effectively ceased operations.
Suddenly, Mr. Trump is publicly fretting about the Chinese people thrown out of work, an odd position for a politician who accuses China of stealing American jobs.
More to the point, the American government was well justified in imposing sanctions on ZTE. The company represents everything wrong with Chinese business practices. On Thursday, the House Appropriations Committee rightfully passed an amendment reinforcing the sanctions.
Plus, it is highly unusual for a President, or any national leader, to interfere with his or her country’s legally imposed trade sanctions. So what is going on?
The widespread speculation is that Mr. Trump has his eye on his June summit with North Korean leader Kim Jong Un. A successful outcome will rely on China’s cooperation, so it is in the President’s political interest to do Beijing a solid on the ZTE file, an issue it considers critical.
As well, China has responded to Mr. Trump’s threatened tariffs with tariffs of its own on U.S. farm products from states that support the President. Mr. Trump is thought to be trying to soften Beijing’s retaliatory measures ahead of the mid-term elections in October.
Then there is a darker imputed motive, based on the fact that a Chinese state-controlled company loaned US$500-million to an Indonesian theme park that will feature hotels, a golf course and a residence branded with the Trump name. The news came just days before the President’s tweet.
Coincidence or not, it looks bad because Mr. Trump refuses to divest himself of his business interests.
The ZTE case is a lesson in how the President is turning U.S. foreign affairs and the enforcement of trade disputes into bargaining chips that serve his political and personal fortunes, but which are unrelated to any consistent policy.
One minute he is scrapping the Iran nuclear deal and imposing sanctions that will hurt his European allies, and the next he is asking his Commerce Department to lift sanctions on a Chinese company that illegally sold American technology to the Iran government – technology that Tehran may have used to spy on its own people.
There is no rhyme or reason to this, except that it fits in with Mr. Trump’s business practices and his view of the law, the government and his role as President. He is the One Great Negotiator, and everything else exists to support him.
The sanctions on ZTE are justified and appropriate, and Mr. Trump shouldn’t interfere with them. But he does so regardless, in order to make political and business deals that benefit him and him alone.