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May 13, 2018, 4:23 p.m. EDT

Trump extends lifeline to sanctioned Chinese tech company ZTE

Trump says in tweet he is working with Chinese president to keep struggling company in business

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By Dan Strumpf

For years, the U.S. has accused equipment made by Shenzhen-based ZTE and its larger crosstown rival Huawei Technologies Co. of being a national security threat, an accusation that both companies have denied.

President Donald Trump said he was working with Chinese President Xi Jinping to keep ZTE Corp. in business, throwing an extraordinary lifeline to the stricken Chinese telecommunication giant.

Trump said in a Sunday tweet that the Commerce Department—which is reviewing ZTE’s  request for a stay of an order banning American companies from selling to the Shenzhen-based firm—has been instructed to “get it done.” Trump added: “Too many jobs in China lost.”

The surprise intervention comes less than a month after ZTE was hit with the ban. The Commerce Department ordered U.S. companies to stop exporting to ZTE in mid-April, saying the Chinese company violated the terms of a 2017 settlement resolving actions for its evasion of U.S. sanctions for earlier selling to Iran.

ZTE, which relies on billions of dollars in component imports from U.S. tech titans such as Qualcomm Inc. /zigman2/quotes/206679220/composite QCOM +1.20%   and Intel Corp. /zigman2/quotes/203649727/composite INTC +1.11%   has warned the ban threatened its survival. Last week, the company said it had ceased major business operations.

The Wall Street Journal reported Saturday that in its efforts to have the ban stayed, ZTE has told U.S. authorities that process and human-resource errors, not a plan of systematic deception, were responsible for the lapses in fully complying with its 2017 settlement, according to a person familiar with the matter. The company also believes that the ban is a disproportionate penalty, this person said. The Commerce Department has said it was reviewing the stay request.

An expanded version of this report appears on WSJ.com .

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