ZTE of China to Pay $1 Billion Fine in Deal to End U.S. Sanctions


“When it comes to China, despite his tough talk, this deal with ZTE proves the president just shoots blanks,” New York Senator Chuck Schumer, the Democratic leader, said in a statement. “There is absolutely no good reason that ZTE should get a second chance, and this decision marks a 180 degree turn away from the president’s promise to be tough on China. It’s up to Congress now to act to reverse the deal.”

During trade talks in Beijing last weekend, the Chinese offered to make nearly $70 billion of purchases of American agricultural goods, natural gas, coal and manufactured products, people familiar with the discussions said. But that offer was conditional on the Trump administration not proceeding with tariffs on $50 billion of Chinese goods. The Trump administration has not yet announced plans to suspend those tariffs, which the White House has said would go into effect shortly after June 15.

Administration officials have stressed that the penalties on ZTE are still tough and will not compromise American national security. But the administration’s sudden change of heart on the company has still left the White House vulnerable to criticism that it is walking back its tough stance on China.

On Wednesday, lawmakers from both political parties took their biggest step yet against the Trump administration’s trade agenda, introducing legislation that would require Congress to approve tariffs issued under a legal statute known as Section 232. The Trump administration has used the law to impose sweeping tariffs on metal imports from around the world, and proposed similar measures on automobile imports.

Both houses of Congress have drafted legislation that would block the ZTE deal, though those efforts remain in initial stages. The House passed a bill last month that would prevent the administration from easing restrictions on the company, while the Senate Banking Committee approved an amendment that would prevent the president from modifying penalties on Chinese companies that had recently violated U.S. law. Mr. Rubio has also introduced a provision into an appropriations bill that would restrict government funds from being used to purchase telecommunications equipment produced by Huawei and ZTE.

ZTE has been at the center of a wide-ranging and complex trade dispute between Washington and Beijing, and its survival has been used as a bargaining chip between the two sides as each imposed tariffs and restrictions on the other’s products and services. The Trump administration privately told lawmakers last month that it had reached a deal to keep the company alive. On Thursday, the administration went public with its decision.

“At about 6 a.m. this morning, we executed a definitive agreement with ZTE,” Wilbur Ross, the Commerce Secretary, said in an interview on CNBC’s “Squawk Box,” adding “This is a pretty strict settlement.”


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