Trump strikes deal with China on ZTE

ZTE logo on a building with a Don't Walk signal in the foreground

ZTE logo on a building with a Don't Walk signal in the foreground

A new report from Reuters says that ZTE and the USA government have reached a deal to get ZTE back in business in the U.S., according to a senior congressional aide.

The Commerce Department last month blocked China's ZTE from importing American components for seven years, having concluded that ZTE deceived US regulators after it settled charges last year of violating sanctions against Iran and North Korea.

President Donald Trump said he was ordering a reconsideration of penalties against ZTE as a favor to the country's president, Xi Jinping, after the company estimated losses of at least $3.1 billion from the USA technology ban. Trump has negotiated a $1.3 billion fine with the Chinese President over a phone call, as per Fox News.

The deal proposed by the U.S. Department of Commerce would allow ZTE to receive American exports, but in exchange, the Chinese company would have to pay a "substantial" fine, make changes to its management team, and hire officers dedicated to American compliance to ensure the company fixes its behavior.

"This is a law enforcement action being handled by Commerce", said Lindsay Walters, the deputy White House press secretary.

Florida Republican Sen. Marco Rubio also came out against it, calling it a "great deal. for #ZTE & China". But news of the agreement drew immediate fire on Capitol Hill.

"ZTE presents a national security threat to the United States - and nothing in this reported deal addresses that fundamental fact", said Sen.

The ZTE talks occur after the US and China last weekend suspended plans to impose tariffs on as much as $200 billion in each other's goods, pulling back from the brink of a trade war.

Rubio added that Congress should act to stop Trump from letting ZTE get back into business.

US intelligence officials think ZTE poses a USA security threat because its products could be used for spying or cyberattacks.

William Evanina, the acting director of the National Counterintelligence and Security Center, said at his May 15 confirmation hearing that he would not use a ZTE phone nor recommend that anyone in a sensitive position in government use one. Would be a huge victory for President Xi, and a dramatic retreat by Pres Trump. The U.S. and China are engaged in high-stakes talks on steel trade and intellectual property rights under the looming threat of punitive tariffs.

ZTE ran into trouble in 2016 for violating US laws restricting the sale of American technology to Iran.

Democrats urge president to put U.S.jobs, national security before China; chief intelligence correspondent Catherine Herridge reports from Washington. On Thursday, the House passed a bill - which will now need to pass through the Senate - that would ban U.S. government employees from using ZTE products and stop the Defence Department from dealing with the company's vendors.

Trump has advanced an adversarial trade agenda with numerous USA allies so far this year, threatening many of them with tariffs if they don't take steps to allow more US companies to freely sell goods overseas.

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