Trump vows to remove US sanctions to preserve trip by China’s Vice Premier

Trump’s “China First” U-Turn

Setting aside his own tariffs and US national security policy, Donald Trump vows to lift sanctions on a major Chinese electronics firm.

Trump announced on Sunday morning that he would be lifting sanctions that were imposed on ZTE, one of the world’s largest makers of smartphones.

Ironically, the Commerce Department’s punishment was imposed on ZTE for breaking US sanctions on Iran — the same sanctions that Trump toughened last week when he withdrew the US from the July 2015 nuclear deal.

See Podcast: Iran — Trump Chooses Confrontation & Regime Change: What Happens Now?

ZTE agreed in March 2017 to a $1.2 billion fine over the trade with Tehran and North Korea. But last month the Commerce Department banned shipments of American technology to ZTE for seven years, saying that the company lied about payment.

The firm has also been accused by some American officials of being a security risk. Democratic Representative Adam Schiff said on Sunday that it posed a “major cyber-security threat”.

Barred from using US microchips, software and other components, ZTE was facing suspension of operations, putting 75,000 jobs at risk.

Beyond the immediate issues around ZTE, Trump’s shift raised questions about his overall policy on China and economic matters. On March 22, he approved tariffs on $60 billion of Chinese goods, raising the prospect of a trade war with Beijing.

A US mission to China earlier this month, led by Treasury Secretary Steven Mnuchin and the Administration’s chief economic advisor Larry Kudlow, failed to make any progress over the US tariffs and China’s response with restrictions on 128 US goods accounting for about $3 billion in trade.

Why Trump Intervened

So why did Trump — a long-time accuser of China for taking US jobs by “raping” the American economy — pledge support for Beijing and break his own policies?

The answer lies in this week’s scheduled trip to Washington by Chinese Vice Premier Liu He to continue discussions around trade.

The visit was announced by the White House last Monday, but it was soon jeopardized by the sanctions on ZTE.

A senior official in the Chinese Commerce Ministry, Wang Shouwen, arrived in Washington on Thursday for preparatory negotiations. “One person familiar with the discussions” said, “If these talks with Wang don’t go well, that will raise questions about whether Liu] will still come.”

“Two people familiar with the situation” confirmed on Monday morning that Liu will now fly to the US tomorrow.

Trump did not directly refer to the question marks over Liu’s visit. Instead, after a round of golf, he tweeted:

Kevin Wolf, who oversaw the launch of the ZTE case as Assistant Secretary of Commerce in the Obama Administration, reacted, “I am speechless. I’m highly confident that a [US] president has never intervened in a law-enforcement matter like this before….It’s so outside the way the rules were set up.”