White House de­fends al­low­ing China’s ZTE to buy US parts

The Korea Times - - WORLD BUSINESS -

WASH­ING­TON (AP) — The White House on Wed­nes­day de­fended Pres­i­dent Don­ald Trump’s de­ci­sion to al­low Chi­nese tele­com gi­ant ZTE to re­sume buy­ing com­po­nent parts from the U.S. — a move the Repub­li­can-led Sen­ate is work­ing to re­verse.

In a state­ment, White House spokesman Ho­gan Gi­d­ley pointed to “mas­sive penal­ties” im­posed on ZTE as part of what he de­scribed as “an his­toric en­force­ment ac­tion” by the Com­merce De­part­ment.

The changes, Gi­d­ley said, “will en­sure ZTE pays for its vi­o­la­tions and gives our govern­ment com­plete over­sight of their fu­ture ac­tiv­ity with­out un­due harm to Amer­i­can sup­pli­ers and their work­ers.”

The deal an­nounced last week with China al­lows ZTE Corp. to stay in busi­ness in ex­change for pay­ing a $1 bil­lion penalty, re­plac­ing its top man- agers and agree­ing to let U.S. reg­u­la­tors mon­i­tor its op­er­a­tions.

The fine comes on top of $892 mil­lion ZTE has al­ready paid for break­ing U.S. sanc­tions by sell­ing equip­ment to North Korea and Iran. ZTE must also put $400 mil­lion in escrow — a sum that it would for­feit if it ever vi­o­lated the agree­ment.

Trump has drawn fire from Congress for in­ter­ven­ing in the case. The Sen­ate has been work­ing to try to re­verse the deal by tuck­ing a pro­vi­sion into a must-pass de­fense pack­age, which in­cludes pay raises for the troops.

The de­fense bill is ex­pected to pass the Sen­ate later this week, and sen­a­tors are un­likely to re­move the ZTE pro­vi­sion. But a show­down could come in the House, which al­ready passed its ver­sion of the de­fense bill with­out it. The two bills will need to be merged.

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