Trump, Xi ease trade tensions with ZTE, Qualcomm reversals

Bloomberg

The US and China signalled a desire to avoid a costly trade war after President Donald Trump offered a lifeline to beleaguered telecom equipment maker ZTE Corp. and China’s Xi Jinping dispatched his top economic adviser to Washington.
Vice Premier Liu He — who is Xi’s top aide for economic matters — was expected to travel on Tuesday to the US for trade talks with Treasury Secretary Steven Mnuchin, the Chinese Ministry of Foreign Affairs said on Monday in Beijing.
Meanwhile, Chinese regulators have restarted their review of Qualcomm Inc.’s application to acquire NXP Semiconductors NV, according to people familiar with the process. The work had been shelved earlier in reaction to growing US trade tensions.
Shares of NXP surged as much as 12 percent in US pre-market trade while Qualcomm was up 3.4 percent.
The moves came after Trump said in a Sunday morning tweet that he and Xi are working together to give ZTE “a way to get back into business, fast.” His administration had cut off the massive Chinese company from its US suppliers for violating the terms of a 2017 sanctions settlement related to trading with Iran and North Korea, then lying about it.
The tweet represented to a drastic shift in tone for Trump, who has sought to use any leverage possible in negotiations aimed at lowering the US trade deficit with China. It was also a major reversal for a president who has accused China many times of stealing US jobs. Trump said the “Commerce Department has been instructed to get it done!” because “too many jobs in China lost.” Trump’s conciliatory message on ZTE drew immediate criticism from US lawmakers of both parties.
“Problem with ZTE isn’t jobs & trade, it’s national security and espionage,” Republican Senate Marco Rubio of Florida said on Twitter.
Senate Minority Leader Chuck Schumer, a New York Democrat, said in a statement that “the toughest thing we could do, the thing that will move China the most, is taking tough action against actors like ZTE. But before it’s even implemented, the president backs off.”
Foreign Ministry spokesman Lu Kang said China “highly commends” Trump’s gesture on ZTE and said it was working on the details with the US. It wasn’t immediately clear if Trump would receive anything in return. The Qualcomm approval, if it comes, would mark another step back from a trade war between the world’s two largest economies.