Count President Donald Trump as one of Chinese phone maker ZTE's new allies.
ZTE, the fourth-largest smartphone maker in the US, has been dealing with a US Commerce Department denial order that prevents US businesses from selling hardware or services to the company -- a seven-year ban that forced ZTE to shut down its "major operating activities."
It looks, though, like ZTE may get a reprieve. Trump tweeted on Sunday that he's working with Chinese President Xi Jinping to "find a way to get back into business, fast."
This would mark a stark reversal of the harsh punishment the Commerce Department handed to ZTE for its failure to properly reprimand employees involved in selling US-origin equipment to Iran. ZTE had been working to get the denial order overturned and had pegged its hopes on broader bilateral trade talks between the US and China.
For Trump, who has made protecting American jobs a marquee element of his presidency, tweeting his concern that there were too many Chinese jobs lost from the penalty is a surprise. But ZTE has long made the argument that it's invested a significant amount into the US, and the company spent $2.34 billion buying from American businesses just last year, according to a person familiar with the company.
"This is entirely unprecedented," said Doug Jacobson, an export controls and sanctions attorney for Jacobson Burton Kelley who represents suppliers that do business with ZTE.
On Monday, Trump tweeted a defense of his perspective on ZTE, noting that it buys parts from US businesses. The Commerce Department pointed to Commerce Secretary Wilber Ross's remarks at a National Press Club luncheon on Monday, in which he hopes "that we can make a fair deal."
"But if that does not happen, a trade tit-for-tat will not be economically life threatening to the United States," Ross said.
ZTE declined to comment.
It's not the first time Trump has intervened when it comes to dealings with foreign companies. In March, the president squashed a deal for Broadcom, headquartered in Singapore, to buy San Diego-based Qualcomm because of concerns it would hurt US leadership in 5G technology.
ZTE had to shut its business down because the Commerce Department ban prevents it from using critical parts of the Android operating system, including access to the Google Play store and newer versions of Android and security patches. In addition, it was prevented from using carrier tools to offer software updates and security patches to existing phones.
The company also couldn't get access to critical components for networking equipment, which it sells to a wide variety of countries, including India, Austria and Italy.
Originally published May 13 at 8:55 a.m. PT.
Update at 3:47 p.m. PT: Added background information.
Update on May 14 at 1:51 p.m. PT: To include comment from the secretary of the Commerce Department.
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