US and China work on ZTE rescue

WASHINGTON (AP) — The United States and China are working toward an agreement that would ease U.S. sanctions that were imposed on ZTE Corp. and let the Chinese telecommunications giant stay in business.

President Donald Trump said Tuesday that the deal might require ZTE to revamp its board and to pay a fine of $1 billion or more.

The ZTE talks occur after the U.S. and China over the 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. China on Tuesday made a conciliatory gesture by cutting the tariff on imported vehicles to 15 percent from 25 percent, effective July 1.

In the face of congressional criticism, Treasury Secretary Steven Mnuchin on Tuesday denied that the U.S. is offering relief for ZTE in exchange for trade concessions.

“This is not a quid pro quo or anything else,” Mnuchin told a Senate Appropriations subcommittee.

The Commerce Department last month blocked China’s ZTE from importing American components for seven years, accusing it of misleading U.S. regulators after it last year settled charges of violating sanctions against Iran and North Korea. The ban was a virtual death sentence for ZTE, which relies on U.S. parts.

“The objective was not to put ZTE out of business,” Mnuchin said. “The objective was to make sure they abide by our sanctions program.”

On Capitol Hill, Republicans and Democrats alike criticized the administration for seeming to go easy on a company that had violated U.S. sanctions.