His comments come after Mr. Trump tweeted on Sunday that he wanted federal officials to help get the Chinese phone company ZTE back into business after USA penalties threatened to shut the business down, according to The Hill.
Senate Minority Leader Chuck Schumer, D-N.Y., and other leading Democrats sent a letter Tuesday to the administration saying Trump's action casts "grave doubt" on his campaign promise to put America first.
Chinese negotiators who were holding trade talks with U.S. counterparts in Beijing in late April, asked the United States to hear ZTE's appeal, and take into account the company's efforts to improve its compliance, and amend the ban.
The sanctions were imposed because the company which relies heavily on United States imports for its operations continued its unlawful selling of items to North Korea and Iran.
Douglas Fuller, an expert on China's tech policies at Zhejiang University in Hangzhou, says the USA could have taken smarter action against ZTE, without hurting US producers that sell it products and "antagonizing China to double down on more techno-nationalist import substitution policies".
Kudlow, who was part of a delegation led by Treasury Secretary Steven Mnuchin that visited Beijing from May 3-4, said the world's two-biggest economies can probably avoid a trade war and even move toward an agreement "very soon".
ZTE should not be operating in the United States and should not have easy access to American technology, Rubio said.
ZTE is known to rely on importing chips from United States firms such as Qualcomm and Intel for up to a third of its components. "So they can't say they don't know what we're asking for", he said.
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White House spokeswoman Lindsay Walters confirmed USA officials were in talks with China about the company, saying that Mr Trump expects Commerce Secretary Wilbur Ross "to exercise his independent judgement, consistent with applicable laws and regulations, to resolve the regulatory action involving ZTE based on its facts". 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.
"Beyond appearing to risk American national security, the statement suggests that the administration is not serious about addressing the many economic challenges China presents".
As of Monday, the USTR's Office has received over 2,700 filings of written comments regarding the administration's tariff approach, with major US business groups opposed to tariffs on Chinese products. But it turns out that Donald Trump wants to save the Chinese company after all.
As for Chinese industry, for now, at least, it "is deeply integrated in global supply chains", observes Kennedy.
"Now Chinese officials are beginning to worry about China's economic resilience and potentially weak domestic demand, thus adding to the pressure on Liu, the helmsman of China's economy", the source said. But he concedes: "I guess there's a balance between needing that connectivity and wanting to reduce your vulnerability" to foreign blockades or reprisals.
But high-tech products are another matter, Kennedy notes, as they are deeply associated with national security and military superiority.
"ZTE did do some inappropriate things, they've admitted to that", said Ross.