Published: Sun, May 27, 2018
Money | By Armando Alvarado

Some Lawmakers Aren't Happy About Trump Administration's Deal With ZTE

Some Lawmakers Aren't Happy About Trump Administration's Deal With ZTE

A potential bill to prohibit ZTE Corp. and other Chinese telecommunications companies from operating in the USA would have supermajority support in Congress, Republican Senator Marco Rubio said.

The reported deal ran into immediate resistance in Congress, where Democrats and Republicans alike accused Trump of bending to pressure from Beijing to ease up on a company that USA intelligence officials have suggested poses a significant risk to US national security. He also said Congress needs to act.

"If the administration goes through with this reported deal, President Trump would be helping make China great again", Schumer said Friday on Twitter.

The Commerce Department imposed the penalties on ZTE after US law enforcement officials found the company broke USA law by selling phones to North Korea and Iran, and then misled US investigators about the sales. If the company complies with these requirements, they will be able to do business with American companies.

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Trump did not reveal more details about the agreement with ZTE, but used the opportunity to give flak to the Democrats over "bad deals" and "Trade Deals [that] are the laughing stock of the world".

Headquartered in Shenzhen, China, ZTE was handed a seven-year ban on buying USA technology components in mid-April.

As part of the agreements, ZTE made a year ago it dismissed four senior employees.

The U.S. Commerce Department would then lift an order issued in April preventing ZTE from buying U.S. products.

With this tweet from President Trump has drawn a lot of criticism from many government officials, because this was the second time when ZTE broked another USA law. ZTE misled the Department of Commerce. Finally, ZTE must move its management team around. "This egregious behavior can not be ignored". Without crucial hardware components, ZTE's factories and most of its 75,000 employees are sitting idle. USA companies provide an estimated 25 per cent to 30 per cent of components in ZTE's equipment.

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ZTE looks to have been thrown a lifeline by the U.S. Government, with a deal reached to allow the company to restart operations.

It appears that the Trump administration felt that the ban dealt too much harm too quickly.

Earlier this month the U.S. president Donal Trump has tweeted and pledged to reverse course saying that President Xi of China and him are working together to give ZTE a way to get back into the business, fast. The US and China are engaged in high-stakes talks on steel trade and intellectual property rights under the looming threat of punitive tariffs.

To block such a deal, Congress would probably need to pass a law with a veto-proof majority that prohibits the Commerce Department from rolling back penalties.

-China trade stand-off - but Trump said today that its new life comes at a cost. "This is particularly critical when the violators are state-owned and -influenced, part and parcel of China's policies and practices created to strengthen its own national security innovation base, and essential tools of efforts to spread China's influence in other countries that pose national security threats to the United States".

Senate Minority Leader Chuck Schumer also decried the deal.

On Thursday, the House passed its own defense policy bill with language banning the Pentagon from purchasing ZTE technology. "If President Trump won't put our security before Chinese jobs, Congress will act on a bipartisan basis to stop him".

Treasury Secretary Steven Mnuchin and Commerce Secretary Wilbur Ross held a meeting with GOP senators on Wednesday laying out the ZTE proposal.

Ross plans to visit Beijing on June 2-4, and China has made saving ZTE one of its priorities.

The telecom company's fate has consumed top administration officials, who have tried to defuse lawmakers' concerns about a deal while responding to Mr. Trump's entreaties to "get it done".

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