White House's Kudlow: Not certain what USA will do on China's ZTE

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It is not well known in the US because it targets the low- to middle-market in China and elsewhere in the developing world.

Few people expect the talks to go smoothly. China is the economic heart of Southeast Asia, accounting for 21 per cent of the region's exports in 2015. "He has my support", Kudlow said, adding that no agreement had been reached yet. However, President Trump seems to have hit upon a brainwave of leveraging the sanctions against the company for obtaining several concessions in trade with China.

China was asked to foreswear its World Trade Organization rights to challenge US trade protection, a request that commentators in China likened to the "unequal treaties" imposed on China by imperialist powers in the 19th century. "As competition becomes more intense in this sector, it could also help bring better services to ordinary consumers in China", he said.

The ZTE reversal could be a big clue that Trump may soften his stance on trade with China.

More than 120 companies and business groups are airing their concerns during three days of hearings on the Trump administration's proposal to impose tariffs on $50 billion worth of Chinese exports.

Ross said that, while he expected Chinese officials would bring up the issue this week, "our position has been that that's an enforcement action separate from trade".

"The US Congress Dept opened itself up to an appeal so there was always hope that a deal could be worked out", said Avi Greengart, research director of consumer platforms and devices at GlobalData. China could put Apple out of business with a stroke, and Apple knows it.

USA officials are now pushing China to back down on agricultural tariffs in exchange for Trump rolling back penalties on ZTE. This would be catastrophic for the world trade system, and you might reasonably wonder if he really would have followed through.

Trump proposed the tariffs after USTR concluded China violates USA intellectual property in a variety of ways, including by forcing American companies to transfer technology.

Shenzhen-based ZTE had to halt most of its business operations and faced serious challenges of survival after the US Commerce Department chose to ban US companies from selling components to the Chinese telecommunications equipment maker for seven years.

Yeah, making ZTE great again will certainly make America great again.

The tariff issue has laid bare a dilemma for US companies, many of which are disappointed with the progress China has made on economic reforms but don't want to be drawn into a diplomatic dispute that would hurt their interests.

"However, when Liu [He] and his peers unveil the opening up measures, they have to be very cautious not to provoke nationalist sentiment, which has been on the rise after the ZTE incident". The U.S. forbid American companies from selling products to the company for seven years, resulting in the company announcing last week it would have to shut down major operations.

But in China, Trump's ZTE comment was portrayed as a victory.

Senate Democrats also criticized the president for appearing to give in to Chinese pressure on the ZTE sanctions.

Last November, China waited until Trump had left Beijing following his first official visit to the country to announce that it would open up its financial sector - a move created to stress it was making reforms on its own terms. Also in part, it is because the collective action dilemmas of managing interdependence with China become easier to manage if the USA can act in concert with its friends, and because the economic pain of doing so is lessened if collectively they can simultaneously deepen their economic integration with one another.

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