The ZTE deal that provided the Shenzhen-based firm with a lifeline following a crippling denial order imposed on it by the Commerce Department in April was “a personal favor to the president of China” Xi Jinping, according to Peter Navarro, President Trump’s top trade adviser. In a recent interview with Fox News, the Washington official described the polarizing settlement as the last chance for ZTE to continue operating in the United States, having called the company “a bad actor.” When questioned why the White House was still adamant to lend a helping hand to a firm that first violated U.S. trade sanctions placed on Iran and North Korea, then failed to adhere to the terms of a 2017 settlement over the matter and lied to federal investigators, Mr. Navarro said the new deal is President Trump’s attempt at “showing some goodwill for bigger efforts.”
The Singapore summit with China and North Korea is one such effort, as are Washington’s ongoing trade negotiations with the Far Eastern country. Beijing, the majority owner of ZTE, has yet to reciprocate the favor that exposed the President to bipartisan criticism from Capitol Hill, with U.S. lawmakers presently debating whether to attempt reversing the new settlement over national security concerns, though their chances to do so successfully remain questionable, threatened by the possibility of a presidential veto that they’d only be able to override with a supermajority vote. American chipmaker Qualcomm is hoping the latest development will help its NXP bid receive approval from China’s antitrust watchdog that has yet to conclude its review of the proposal 20 months since it was first announced, being the last competition regulator in the world with the power to block the $44 billion merger.
ZTE is now once again able to purchase Qualcomm’s Snapdragon chips, license the latest versions of Google’s Android operating system, and acquire other American technologies crucial to its operations. The episode may spur more silicon-related investments in China, currently the world’s largest semiconductor importer, according to some industry watchers. ZTE recently apologized to its employees for the uncertainty that stemmed from its transgressions, having vowed to do better moving forward.