US President Donald Trump says he is working with Chinese President Xi Jinping on trade. Picture: AFP
US President Donald Trump says he is working with Chinese President Xi Jinping on trade. Picture: AFP

Donald Trump is teaming up with China

AFTER sparking fears of a global trade war with China just months ago, Donald Trump had made a surprising pledge.

The President vowed overnight to help Chinese telecom giant ZTE get back to business, after the company said it would suspend "major operating activities" based on the US government's recent trade restrictions.

In a tweet, Mr Trump said he is working with Chinese President Xi Jinping to get jobs back into 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. Too many job ...

In a separate tweet, he said the two economic giants were "working well together on trade", adding that the two countries are working together to reach a compromise.

China and the United States are working well together on trade, but past negotiations have been so one sided in favour of China, for so many years, ...

The concession - considered a major reversal of Mr Trump's plan - comes ahead of high-level trade talks between Washington and Beijing, and follows months of rising tensions and the threat of a looming trade war between the two powerful countries.

In March, a furious Beijing lashed out at Mr Trump's decision to impose steel and aluminium tariffs on China, warning a trade war is the last thing the world wants.

ZTE's fibre-optic networks depend on US components and its cheap smartphones sold en masse abroad are powered by US chips and the Android operating system.

Without access to such technology, the company has been forced to partially shut down. "Major operating activities of the company have ceased," ZTE said in a filing on Wednesday.

The ban was the result of ZTE's failure to comply with an agreement with the US government after it pleaded guilty last year to conspiring to violate US sanctions by illegally shipping US goods and technology to Iran, the Commerce Department said.

American companies are estimated to provide 25 per cent to 30 per cent of the components used in ZTE's equipment, which includes smartphones and gear to build telecommunications networks.

Mr Trump's reversal will likely have a significant impact on ZTE's US suppliers, such as Qualcomm and Intel. US companies are banned from exporting goods to ZTE, making it difficult for the phone-maker to manufacture new products or update older ones.

The move has raised some concern among national security officials.

California Representative Adam Schiff said: "Our intelligence agencies have warned that ZTE technology and phones pose a major cyber security threat. You should care more about our national security than Chinese jobs."

Representatives from Beijing and Washington are expected to meet this week or next.


- With wires