Donald Trump's ZTE deal poised for Senate rollback

Remigio Civitarese
Giugno 13, 2018

The move enraged Republicans and Democrats who said ZTE not only worked with Iran and North Korea in violation of US sanctions, but is a threat to national security, offering Chinese intelligence operatives a way to spy on the USA through ZTE products.

Confirming details of the deal, ZTE said late on Tuesday it would replace its board of directors and that of its import-export subsidiary ZTE Kangxun within 30 days of the June 8 order being signed by the United States.

But the ban on buying USA parts, imposed by the department in April, will not be lifted until the company pays the fine and places $400 million more in escrow in a US -approved bank, the agency said.

ZTE, whose survival has been threatened by the ban, secured the lifeline settlement from the Trump administration on Thursday.

The Senate appears poised to take the first major step to rein in President Trump's trade policies, after senators struck a deal Monday on a measure that would block his plans for dealing with Chinese telecom firm ZTE.

Sen. Cotton explained on Twitter that ZTE has extensive ties with the Chinese Communist Party and a record of doing business with North Korean and Iran.

Days after the Trump administration agreed to restore Chinese telecom firm ZTE's access to its US parts suppliers, a bipartisan group moved to block the deal. But the Senate's bill must still be reconciled with the version of the defense bill that passed the House last month.

Lawmakers said they were shocked Mr. Trump was going soft, after all the tough talk of cracking down on China during the presidential campaign. "But it will be three strikes you're out for ZTE".

"If this was just a violation of sanctions, then the penalty is fine, but for me it's more than that", said Sen. Marco Rubio (R-Fla.), another chief backer of the amendment. Rubio supports the new language in the defense bill.

"The Senate is saying loudly and in a bipartisan fashion that the president is dead wrong to back off on ZTE", said Minority Leader Charles E. Schumer, New York Democrat.

As part of the deal, ZTE promised to replace its board and executive team within 30 days, open itself up to USA inspections of its sites and improve public disclosure of its supply chain.

"While the nightmare is now over, ZTE will likely have to deal with many changes", analysts Edison Lee and Timothy Chau at Jefferies wrote in a note. The U.S. commerce department can exercise discretion in granting exceptions.

"We're just continuing the conversation", said Sen. "But if ZTE ceased to exist then I have no doubt it would basically be absorbed by Huawei and we would not be able to solve the under lying problem".

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