The U.S. and China are closing in on a deal that would give China’s ZTE Corp. a reprieve from potentially crippling U.S. sanctions in exchange for Beijing removing tariffs on billions of dollars of U.S. agricultural products, said people in both countries briefed on the deal.
The negotiations would also ease roadblocks in China faced by a U.S. semiconductor company Qualcomm Inc., whose proposed acquisition of NXP Semiconductors NV of the Netherlands has been held up by Beijing. China’s Commerce Ministry has pledged to immediately restart its review of the acquisition, a person close to the agency said. The ministry has held up a number of multibillion-dollar cross-border deals being pursued by U.S. companies over the past few months.
ZTE is a Shenzen-based telecommunication-equipment producer that has been hamstrung by a U.S. ban on component sales to the firm.
A deal isn’t completed and could fall apart as discussions continue, particularly since the U.S. side is sharply divided over how to deal with China. On Sunday, President Donald Trump said in a tweet that he was working with Chinese President Xi Jinping to get ZTE “a way to get back into business, fast. Too many jobs in China lost.” He said the Commerce Department has been instructed to “get it done!”
The tweet took many in Mr. Trump’s inner circle by surprise, said people involved in the discussions, and wasn’t preceded by interagency discussions on the policy. Treasury Secretary Steven Mnuchin, who has been leading discussions recently with Chinese officials in Washington, has been the key player in the ZTE deal discussions, said people involved in U.S. talks with China.
Write to Lingling Wei at lingling.wei@wsj.com and Bob Davis at bob.davis@wsj.com
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