ZTE reprieve paves way for next round of US-China trade talks

Chinese vice-premier for Washington talks after Trump lifts telecoms group blockade

Donald Trump’s reprieve for telecoms group ZTE has paved the way for a Chinese delegation’s arrival in Washington for at least three days of talks aimed at averting a trade war. Photograph: EPA
Donald Trump’s reprieve for telecoms group ZTE has paved the way for a Chinese delegation’s arrival in Washington for at least three days of talks aimed at averting a trade war. Photograph: EPA

US president Donald Trump’s surprise reprieve for telecoms group ZTE has paved the way for a Chinese delegation’s arrival in Washington for at least three days of talks aimed at averting a trade war, according to people briefed on the discussions.

China's foreign ministry confirmed on Monday that vice-premier Liu He would travel to Washington on Tuesday, less than 24 hours after Mr Trump ordered his commerce department to help the Chinese telecommunications company "get back into business, fast".

ZTE said last week that it would cease operations after the Trump administration hit it with crippling sanctions for allegedly violating the terms of an earlier settlement over its business operations in Iran. Denis O'Brien's Digicel was one of the companies it worked with.

"We greatly appreciate the positive attitude from the US side towards the issue relating to ZTE," said Lu Kang, chief spokesman for China's foreign ministry.

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Mr Lu said the vice-premier would meet a US delegation led by treasury secretary Steven Mnuchin, who is believed to be more amenable to a trade settlement than administration "China hawks" such as trade representative Robert Lighthizer and White House trade adviser Peter Navarro.

One person close to the negotiations echoed fears in the US business community that Mr Trump might be tempted to accept a deal that reduced China’s $337 billion trade surplus with the US but did not address more structural issues, such as market access and technology transfers to Chinese joint venture partners.

“The capitulation has begun,” the person said.

Mr Trump’s tweet on ZTE, which added that “too many jobs in China [would be] lost”, was all the more surprising given the stringent demands made by US trade negotiators in Beijing earlier this month. – Copyright The Financial Times Limited 2018