Trump made "good intentions" to save ZTE, but we still don't want to be too happy. Since April 16, ZTE (Zhongxing) has passed 28 days since the embargo of the U.S. embargo. . ZTE suffered heavy losses. "The main business activities have been unable to carry out." It can even be said that it has entered the state of "shock." However, things now have a new turn. On May 11, a spokesperson for the US Department of Commerce’s Bureau of Industry and Security (BSI), responsible for export controls, said that the agency is evaluating ZTE’s complaint and will immediately consider it. Yesterday evening, US President Trump publicly posted a message on Twitter, saying that he will actively help ZTE resume operations as soon as possible. This also indicates that the ZTE event has ushered in a new turning point.
Trump made "good heart", ZTE event ushered in a turning point
On May 13th, U.S. President Trump Public Development, who has always liked to “tweet the country†through social networks, stated that “I and the Chinese leaders are providing China’s telecommunications giant ZTE with a way to quickly resume operations.†Since the ZTE incident will lead to the loss of too many jobs in China, I have instructed the Ministry of Commerce to complete this work."
From Trump's Twitter news, we can see some key information:
1. Trump and Xida conducted some exchanges on the ZTE event.
Indeed, since the Zhongxing incident, the Chinese government has always been very concerned. At the beginning of this month when the U.S. delegation came to Beijing to discuss trade issues, the Xinhua News Agency reported that "China has negotiated solemnly with the U.S. side regarding the ZTE Corporation case. The U.S. said that it attaches importance to the Chinese representation and will report to the U.S. president on the Chinese position." The ZTE incident has ushered in a turning point and naturally is inseparable from the active efforts of the countries behind it.
2. Trump has instructed the US Department of Commerce to help ZTE resume normal operations.
In other words, the U.S. Department of Commerce may suspend the execution of the export restraint order against ZTE. If this is the case, the crisis of ZTE may be resolved.
3. In addition, Trump’s push text means that the reason why he helped solve the Zhongxing incident was mainly because of Xi’s concern that the ZTE incident may lead to a large number of Chinese personnel unemployed.
According to "Finance", ZTE, headquartered in Shenzhen, was established in 1985 and is China's second-largest and fourth-largest telecommunications equipment manufacturer in the world. Its operating revenue in 2017 was RMB 108.82 billion. ZTE currently has nearly 80,000 employees. If ZTE dies, counting the industry chain, hundreds of thousands of channels will be affected. The livelihoods of these hundreds of thousands of employees will be problematic, and it is difficult to have such a large number of alternative jobs in a short time.
But when did Trump become so "heartfelt"? Is it really because of concern about the unemployment of a large number of Chinese personnel that they suddenly took the initiative to actively help ZTE restore normal operations?
Of course, Trump’s speeches have indeed brought about a smooth reconciliation of the ZTE event and brought new hope!
We still don't want to be too happy
However, we and I do not want to be too happy. We all know that the United States is a three-power split government, and many things are not the President of the United States alone.
Sure enough, at 5:40 this morning, the White House spokesperson said Trump anticipates that Commerce Secretary Ross will independently determine and resolve ZTE's regulatory issues. Trump authorities are communicating with China on ZTE's issues and some other bilateral relations issues. U.S. President Trump’s tweet on ZTE highlighted the importance of “free, fair, balanced, and mutually beneficial†Sino-U.S. economic and trade relations. Earlier, Ross had accused ZTE of "extremely bad" behavior.
In addition, Kevin Wolf, former Assistant President Commerce Minister of the Obama administration who conducted an investigation on ZTE, said in an interview with the Financial Times: “(For Trump’s speech on Twitter) I Without words, I can safely say that there has never been a United States president who has interfered with law enforcement affairs like this."
However, Frank Samolis, co-chairman of international trade at SquirePattonBoggsLLP, said to the Caijing reporter that it is very important for Chinese companies to "read and understand Washington." He said: "This government is unprecedented. The relationship between President Trump and the Republican members of the National Assembly is also unprecedented. The presidential leading Republican Party has completely weakened the position of the leader of the Republican Congress. They do not agree with Trump. But it is impossible to challenge the President. Some respected Republican leaders are inclined to completely obey Trump in economic and trade policies."
However, the U.S. Department of Commerce has not yet made an official response to this issue. At the same time, ZTE did not have any new news. So, so far, things have not actually progressed. We still need to calm down.
Even if the U.S. government really lifts the embargo on ZTE, it will inevitably make ZTE pay a small price. When ZTE first encountered the US embargo in 2016, ZTE finally reached a settlement with the United States under the active mediation of the Chinese government. However, it was fined 8.9 billion U.S. dollars, resulting in 2016 net profit plummeting by 174% year-on-year. This time, I believe the U.S. government will not let ZTE unconditionally.
In addition, we are still unclear whether Trump’s initiative to release “goodwill†to help ZTE is the result of pressure from the Chinese side, or the result of negotiations between China and the United States on the reciprocal exchange of interests, or the result of China’s exchange of concessions. ?
Behind Trump's "Benevolence"
After Trump released the tweet last night, for a time, major domestic media, self-media, and friends circled each other, and even many netizens expressed that “the United States has finally put it down!†But it is obviously not the case!
For Trump’s initiative to release “goodwillâ€, we really need to clearly understand that Trump is essentially a businessman and will not send “good intentions†for no reason. This is actually to seek the interests of the United States itself. maximize. This is especially true when the trade war between China and the United States continues. Prior to this, Core Intelligence reported on many occasions that the ZTE may be a piece of the United States during the Sino-US trade war.
As we all know, the "carrot + stick" strategy has always been a time-tested trick in the United States. Trump's "goodwill" for the ZTE incident actually means "this is like trying to beat you half dead, and then send you to the hospital again, saying that fortunately I saved you in time, otherwise you have life-threatening." Before sending you to the hospital, it is bound to put forward some additional conditions. And these additional conditions of the United States must be related to the trade negotiations between China and the United States.
Sure enough, just a few hours after Trump issued a tweet to help resolve the ZTE incident, Trump sent another tweet, saying that "China and the United States are working together to negotiate trade, but most of the previous negotiations were For the sake of China’s interests, it has been very difficult for them to achieve a favorable situation for both sides for so many years, but rest assured that all problems will be resolved!â€
Trump’s tweet is very obvious. In plain English, it is: “In the trade negotiations between China and the United States, most of the content of the previous negotiations was for the sake of China’s interests. For example, I’ve just considered for the benefit of China and helped to solve it. Because of the ZTE problem, China should also consider more consideration of the interests of the United States."
Did the United States take the initiative to make concessions or did China compromise?
In the Sino-US trade negotiations earlier this month, the two sides did not reach a breakthrough agreement. According to Xinhua News Agency, the two sides reached consensus on some trade issues, but did not provide details. China and the United States also acknowledged that there are major differences on some issues and will continue to communicate. The reason why this negotiation did not make substantive progress was because the United States has put forward many harsh and even rude conditions to China.
According to the "conditional list" exposed by the "Wall Street Journal", which includes: demanding that China immediately reduce trade imbalances; China must reduce the US$200 billion trade deficit with the United States within two years up to 2020; China must stop His own subsidies in the high-tech field; China must open markets to the United States in accordance with the requirements of the United States; must purchase large quantities of US products; and must not require US companies to transfer technology to China, etc., "eight requirements." Even the United States proposed that if it feels that China does not cooperate, it can immediately use tariffs to impose sanctions on China. However, China must not counterattack, can not impose tariffs on US products, and can only abolish tariffs.
Obviously, it is impossible for the Chinese government to accept these completely unequal and rude requests from the United States.
Looking back at the previous Sino-U.S. trade wars, we can see that the contest between the two sides can be described as equal and inconsistent. China also has the ability to counter the United States.
On March 8, 2018, US President Trump signed an announcement confirming that imported steel and aluminum products threatened US national security and decided to impose tariffs (ie 232 measures) on imported steel and aluminum products from March 23.
Subsequently, China launched countermeasures, announcing that it will suspend tariff reduction obligations on seven categories of 128 imported commodities originating in the United States from April 2 and increase the tariff rates on 120 imported products such as fruits and products by 15%. A tariff rate of 25% was imposed on eight imported goods such as pork and products.
On April 3, U.S. local time, the U.S. government issued a list of approximately 1,300 individual tariff items based on the findings of the 301 investigation unilaterally. The U.S. announced that it intends to impose an additional 25% on imported products originating in China on the list. The tariffs involved about 50 billion US dollars worth of Chinese exports to the United States.
On April 4, China issued an announcement regarding the imposition of tariffs on certain imported goods originating in the United States. It has decided to impose a 25% tariff on 14 categories of 106 imported products such as soybeans, automobiles and airplanes originating in the United States, involving a Chinese import amount of approximately US$50 billion from the United States. Soybeans and automobiles are Chinese imports of bulk commodities from the United States. According to the American Soybean Association, one-third of the soybeans produced by US farmers each year are sold to China, with a total value of about US$14 billion. China's imports have at least doubled in the past decade. In 2017, more than 60% of US soybean exports went to China. If China really starts implementing this decision, it will cause a major blow to the United States. Although China did not announce the specific implementation time, in fact, China has already begun to reduce the import of soybeans to the United States and increased the proportion of Brazilian soybean imports.
On April 17, just after the United States announced the sanctions against ZTE, the Chinese government announced that from April 18 onwards, when importing importers importing sorghum produced in the United States, the importers should base on the margin ratios of the various companies determined by the ruling (178. 6%) Provide relevant security deposits to the Customs of the People's Republic of China.
For the trade talks at the beginning of this month, Trump also threatened earlier that if negotiations fail to make progress, he will impose tariffs on up to 150 billion U.S. dollars worth of Chinese goods in order to punish China’s intellectual property rights. The Chinese government responded that China will retaliate against U.S. exports for the same degree.
It is also worth noting that in the context of the Sino-US trade war, the United States sanctioned ZTE and launched an investigation into Huawei. The Chinese Ministry of Commerce has been delaying the approval of Qualcomm and NXP mergers and acquisitions, as well as the approval of U.S. capital to shareholder Semiconductor. The bargaining chips in the trade war.
As a contest between big powers, natural considerations are more of a global interest. Therefore, China also categorically fails to compromise on the request of the United States to “reduce the trade deficit of US$200 billion†for the sake of a company’s gains and losses. Therefore, the writer is more willing to believe that Trump’s initiative to release “goodwill†was mainly due to the fact that China’s previous countermeasures have exerted tremendous pressure on Trump in the United States.
Because Trump is currently actively seeking re-election, it is also paying special attention to the 2020 election campaign. Prior to this, China’s proposed tariff increase list for the United States was also more targeted at the precision strike in the US region that supported Trump in the 2016 election. The design goal of China's proposed tariff increase list may first be to undermine President Trump's Republican state.
According to statistics from foreign research institutions, in the number of major US “counties†affected by China’s intention to impose tariff lists, the number of “Trump County†affected is far greater than that of “Hillary Countyâ€. Obviously, once China's proposed tariff increase list is implemented, it will focus on hitting areas where voters support Trump, thus destabilizing Trump's popular support base. This will be a great blow for Trump to seek re-election.
Previously, the US agricultural industry organization “farmers for free trade†(FarmersforFreeTrade) also made special advertisements calling for freedom of trade, and specifically put in the prime time of Trump's favorite television channels. The protagonist in the advertisement is a soybean farmer from Indiana, and it was also the voters who had previously supported Trump.
Obviously, for Trump, if he is actively seeking re-election, he will inevitably choose to reach a reconciliation with China as soon as possible in the trade negotiations and obtain more favorable negotiations for his future reappointment.
Just at 3 pm today (14th), Foreign Ministry Spokesperson Lu Yong announced that at the invitation of the U.S. government, special envoy of President Xi Jinping, member of the Political Bureau of the CPC Central Committee, vice premier of the State Council, and Chinese leader of the China-U.S. Comprehensive Economic Dialogue, Liu He He will visit the United States from May 15 to May 19. At that time, Vice Premier Liu will continue consultations with the U.S. economic team led by U.S. Treasury Secretary Mukuchin.
Trump said just now that he wants to help ZTE resume normal operations. China immediately announced the appointment of a representative to visit the United States. Obviously this is not a simple coincidence in time.
From this point of view, Trump's initiative to release "goodwill" may be precisely "retreat into progress," and he hopes that in the next round of negotiations, he will obtain a corresponding reciprocal concession in certain aspects. Although we all hope that Trump's "goodwill" is unconditional, it is obviously unrealistic!
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