Quantcast
Connect with us

Trump floats management changes instead of sanctions for China’s ZTE

Published

on

U.S. President Donald Trump on Tuesday floated a plan to fine ZTE Corp and shake up its management as his administration considered rolling back more severe penalties that have crippled the Chinese telecommunications company.

Trump’s proposal ran into immediate resistance in Congress, where Republicans and Democrats accused the president of bending to pressure from Beijing to ease up on a company that has admitted to violating sanctions on Iran.

ADVERTISEMENT

Their reaction could complicate Trump’s efforts to win concessions from China that would narrow a $335 billion annual trade gap.

Speaking at the White House, Trump said U.S. technology companies have been hurt by an April Commerce Department decision that prohibits them from selling components to China’s second-largest telecommunications equipment maker. ZTE shut down most of its production after the ruling was announced.

“They can pay a big price without necessarily damaging all of these American companies,” Trump said.

Trump said ZTE may instead face a fine of up to $1.3 billion, new management and a new board of directors, though it was not clear whether he had the legal authority to impose new financial penalties.

That drew a quick response from Republicans and Democrats in Congress.

ADVERTISEMENT

Some 26 senators, including the chamber’s top Democrat, Chuck Schumer, and No. 2 Republican, John Cornyn, urged the administration in a letter to keep penalties in place for “serial and pre-meditated violators of U.S. law, such as ZTE.”

The Senate Banking Committee also voted 23-2 to make it harder for the president to modify penalties on Chinese telecommunications firms, drawing the support of liberal Democrats like Chris Van Hollen and conservative Republicans like Tom Cotton.

The Republican-controlled House of Representatives is weighing a proposal that would block the sale of ZTE products and those of another Chinese company, Huawei Technologies [HWT.UL], until national security officials certify they are safe. It would be added to a defense-policy bill that Congress typically passes each year.

ADVERTISEMENT

Congress last year passed a law that required the administration to impose new sanctions on Russia, though similar action this year could be more difficult as the November elections draw near.

According to sources familiar with the discussions, a proposed trade deal with China would lift a seven-year ban that prevents U.S. chipmakers and other companies from selling components to ZTE, which makes smartphones and telecommunications networking gear.

ADVERTISEMENT

In return, China would eliminate tariffs on U.S. agriculture or agree to buy more farm products from the United States.

The U.S. Commerce Department imposed the ban in April after it determined that ZTE had broken an agreement after it pleaded guilty to shipping U.S. goods and technology to Iran.

The ban has threatened the viability of ZTE by cutting off access to companies that supply 25 percent to 30 percent of its components. Suppliers include some of the biggest U.S. tech companies, including Alphabet Inc’s  Google, which licenses its Android operating system to ZTE, and chipmaker Qualcomm Inc .

ADVERTISEMENT

The U.S. Department of Defense has also stopped selling ZTE’s mobile phones and modems in stores on its military bases, citing potential security risks.

NATIONAL SECURITY
U.S. Treasury Secretary Steven Mnuchin told lawmakers that the treatment of ZTE was not “a quid pro quo or anything else” related to trade, and said it would not undermine national security.

“I can assure you that whatever changes or decisions that are made in Commerce will deal with the national security issues,” Mnuchin told a U.S. Senate appropriations subcommittee.

Republican Senator Marco Rubio said he thought China had gotten the upper hand in recent negotiations on trade and North Korea denuclearization.

ADVERTISEMENT

“China knows there are those in the administration that desperately want a deal,” he said.

One sanctions expert questioned whether Trump has the legal authority to impose new fines on ZTE, which agreed last year to pay $1.19 billion, including $890 million in fines and penalties, and an additional penalty of $300 million that could still be imposed.

“It looks like this is going to be a case where they’ll have some minor tweaks and declare a victory and move onto the next case,” said Washington lawyer Douglas Jacobson, who represents ZTE suppliers.

Additional reporting by Karen Freifeld, Diane Bartz, Amanda Becker, Richard Cowan, Susan Heavey, Doina Chiacu and David Lawder in Washington and Michael Martina in Beijing; Writing by Andy Sullivan; Editing by Chris Sanders, Paul Simao and Lisa Shumaker

ADVERTISEMENT


Report typos and corrections to: [email protected].
READ COMMENTS - JOIN THE DISCUSSION
Continue Reading

Breaking Banner

Chuck Schumer wants John Bolton and Mick Mulvaney to testify at Trump’s Senate impeachment trial

Published

on

Senate Minority Leader Chuck Schumer wants top administration officials to testify in President Donald Trump's impeachment trial in the United States Senate.

The House of Representatives is expected to pass articles of impeachment on Wednesday, setting up a Senate trial in the new year.

"In a letter sent on Sunday evening to McConnell, the majority leader, Schumer says Senate Democrats want to hear testimony from four administration witnesses, including acting chief of staff Mick Mulvaney and former national security adviser John Bolton," Politico reported. "There is almost no chance Senate Republicans would vote to subpoena those witnesses without assent from the White House and calling their own preferred witnesses."

Continue Reading

Breaking Banner

Supreme Court timeline on Trump’s taxes gives time for Manhattan prosecutors to file charges: Former US Attorney

Published

on

Former U.S. Attorney Mimi Rocah tweeted a recent report that the U.S. Supreme Court would be taking up President Donald Trump's case to keep his taxes away from investigators.

That case between Trump and Congress invokes a 1924 law that says the Ways and Means Committee has the authority to seek tax returns. Rocah mocked the president for being "so shady, so corrupt, so unlawful, that you’re willing to fight the release of your tax returns all the way to the Supreme Court."

Continue Reading
 

Facebook

Trump has spent 50 years trying to live up to his father — now his presidency will forever be stained: MSNBC panelist

Published

on

Rev. Al Sharpton said during his MSNBC show Sunday that the legacy of impeachment will forever be a stain on President Donald Trump's presidency. While a Democratic strategist pointed to Trump's history of always falling short.

"The fact is I've known Donald Trump for 35 years," Sharpton said during a panel discussion. "Marched on him after the Central Park Five. Had other times he would try to be a Democrat, would come to our National Action Network conventions. One of the things that is core to him is that he's always fought for legitimacy. He was never looked at as a peer by the legitimate business community in New York and around the country. Now for him to be impeached, even if he's not convicted and removed, it gives him the imprimatur from here out that he's illegitimate. There will always be the asterisk on his name that schoolchildren will read. Is this the reason we're seeing 170-some-odd tweets from Mr. Trump that he is feeling at the core that his legitimacy as a president will be permanently stained?"

Continue Reading