From the backstage of the US Commercial War. How did he “break Trump” what Obama had done, after a phone from Xi Jinping

On March 22, 2018, Robert Lighthizer- the 18th commercial representative of the United States (US representative- USTR), during Donald Trump's presidency, wrote a report that detailed the conclusions of China's commercial practices. There, he claimed that China raises its economic empire using the stolen technology and property from the United States.

The complaints against Chinese economic policy were too much to not be considered. Subsidies and commercial barriers threatened them all: from Detroit car manufacturers and Pennsylvania steel to Georgia breeders and North Carolina furniture. But one domain was in the first place: technology, writes Edward Fisherman in the book “Chokepoints”.

The Chinese government “seeks to become a world leader in a wide range of technologies” by any ways. Technological domination would allow China to overcome America from an economic, military and diplomatic America, shows the report.

But it was not clear how an effective technological counter -offensive could look. The preferred Lighthizer tool, rates, would reduce the demand for Chinese technology on the US domestic market, but would not reduce the attractiveness of Chinese products in other sectors and therefore would not prevent Chinese companies from taking over the market share of US enterprises.

The first effort of the Trump administration to prevent Huawei domination on 5G was a case study in these difficulties. Leaded by Robert Spalding, the senior director of the NSC for strategic planning, the campaign aimed to isolate America's 5G networks from Huawei technology. But even this relatively modest project has encountered obstacles almost immediately.

“It cannot be confident that Huawei and ZTe are free from the influence of the state”

At that time, the big US telecommunications companies, such as AT&T and Verizon, were in the process of testing 5G capabilities. For years, these American operators have largely avoided equipment made by Huawei and ZTE.

In 2012, a report of the Information Committee of the Chamber concluded that “it cannot be confident that Huawei and ZTE are free from the influence of the state” and that “the risks associated with the provision of equipment by Huawei and ZTE for the critical infrastructure of the US could undermine the essential US security interests.”

At that time the Huawei's 5G equipment was considered the best and had a price of 30 percent lower than the comparable equipment produced by Ericsson and Nokia. The decision of the carriers to boycott Chinese producers only on the basis of a Gentlemen's Agreement with Congress had become a difficult decision.

In 72 hours, the Spalding was inevited to make his luggage. “There was no” hey, thank you for the service offered “

The solution proposed by washing was for Washington to play a much greater role in building the 5G networks of the country. The federal government could purchase all the necessary equipment itself, ensuring that it does not contain Chinese manufactured components and rent it to operators such as AT&T, Sprint, Verizon and T-Mobile.

With the ideas of Spalding still in the early stages, on January 28, 2018, Axios published a story under the title “Scoop: the Trump team takes into account the nationalization of the 5G network”. The article was written that “Trump national security officials consider an unprecedented federal takeover of a part of the nation's mobile network to protect against China.”

The players in the market, fearing that the Trump administration was planning to nationalize the industry, they mobilized quickly to destroy the ideas of Spalding. The White House hastened to control the damages, and the president of the Federal Communications Commission promised that “the market, not the government, is best positioned to stimulate innovation and investments.”

In seventy-two hours, Spalding was inevited to make his luggage. “There was no” hey, thank you for the service offered “, later reflected. “It was just” go out. And you see not to hit the door over your back, “he says, quoted by Fisherman

ZTE was not at the first deviation. During Obama's second term, when the US authorities confiscated a Laptop from ZTE's financial director, while it was through the Security of Logan Airport in Boston. It was discovered that the laptop contains a “treasure” of documents that demonstrate the existence of an elaborate plot of ZTE to buy American technology and to resell Iran. ZTE was flagrantly caught in violation of American sanctions and export control laws.

ZTE pleaded guilty of criminal charges and agreed to review its management and pay a fine of $ 1.2 billion,

In response, the Trade Department issued an order that restricts US companies to sell to ZTE. Because ZTE has largely based on imports from the United States, including Google software and Intel and Qualcomm chips, hastened at the negotiation table. The discussions were dragged into Trump's new administration and one week after Wilbur Ross took over his post-secretary secretary, the two parties reached an agreement. ZTE pleaded guilty of criminal charges and agreed to review its management and pay a fine of $ 1.2 billion, the largest ever perceived by the US government in a case of export control.

But Ross learned at the beginning of 2018 that ZTE was violating the terms of the agreement – the company had even granted succulent bonuses to the directors he had promised to reproach them – it was angry. On April 16, Ross approved a “refusal order” for ZTE, a draconian control of exports (very rarely used), which forbade the Chinese company to buy any product made in the US.

Xi Jinping could not stand with his hands in the breast. On May 8, he called Petrump and asked to give ZTE a postponement as a personal favor

The day after Commerce imposed the sanction, ZTE suspended the trading of his actions on the scholarships in Hong Kong and Shenzhen, evaluating the “full range of implications”. Three weeks later, the company made an amazing announcement: “As a result of the refusal order, the major operational activities of the company have ceased.” ZTE has actually closed. By harmonizing the central role of America in peak technology, Washington was about to destroy the second producer of telecommunications equipment in China. And it all happened in less than a month.

Xi Jinping couldn't stand with his hands in his breast while a great Chinese technology company implocked. On May 8, he called Petrump. Xi asked Trump to give ZTE a postponement as a personal favor. He spoke to Trump of tens of thousands of Chinese workers who would lose his jobs (a call that would have been more convincing from a democratic leader than the head of a Unipartide dictatorship that did not respond to the voters). However, Trump agreed, assuming that Xi will remain in the future, “Chokepoints” shows.

A few days later, Trump said: “President XI and I work together to give the massive Chinese telephone company, ZTE, a way to return to business quickly. Too many jobs were lost in China. The Trade Department was instructed to do so!”

Why Trump has suddenly passed from China jobs maybe.

Trump offered ZTE a new chance at life. His reasons became even clearer: he was willing to set aside the concerns about national security and undermine a decision of his own secretary of trade, if he could help him obtain the commercial agreement with China.

The Congress tried, but failed to reverse Trump's decision on ZTE by legislation. The Trade Department has hurried negotiations with ZTE, and in June, Ross announced that the Chinese company had agreed to pay an additional $ 1 billion fine. Payment was a much better offer for ZTE than to cease its activity. In a short time, the company resumed its operations and the same recovered.

ZTE had been spared, but for Chinese leaders, the episode was an alarm signal on the vulnerability of their technological champions.