US law­mak­ers push back on Trump talk of help­ing China’s ZTE

Af­ter Pres­i­dent Don­ald Trump said he would help the Chi­nese ZTE get back into busi­ness and de­fended his de­ci­sion on Mon­day, U.S. law­mak­ers re­jected the pres­i­dent’s plan, call­ing the firm a se­cu­rity threat

Daily Sabah (Turkey) - - Business -

U.S. law­mak­ers on Tues­day re­jected any plan by Pres­i­dent Don­ald Trump to ease re­stric­tions on China’s ZTE Corp, call­ing the telecom­mu­ni­ca­tions firm a se­cu­rity threat and vow­ing not to aban­don leg­is­la­tion clamp­ing down on the com­pany.

Trump on Mon­day had de­fended his de­ci­sion to re­visit penal­ties on ZTE for flout­ing U.S. sanc­tions on trade with Iran, in part by say­ing it was re­flec­tive of the larger trade deal the United States is ne­go­ti­at­ing with China.

“I hope the ad­min­is­tra­tion does not move for­ward on this sup­posed deal I keep read­ing about,” Repub­li­can Se­na­tor Marco Ru­bio said. Bi­lat­eral talks be­tween the world’s two big­gest economies re­sume in Wash­ing­ton this week.

The Trump ad­min­is­tra­tion is con­sid­er­ing an ar­range­ment un­der which the ban on ZTE would be eased in ex­change for elim­i­na­tion of new Chi­nese tar­iffs on cer­tain U.S. farm prod­ucts, in­clud­ing pork, fruits, nuts and gin­seng, two peo- ple fa­mil­iar with the pro­posal said. The po­ten­tial ar­range­ment was first re­ported by the Wall Street Jour­nal.

“They are ba­si­cally con­duct­ing an all­out as­sault to steal what we’ve al­ready de­vel­oped and use it as the base­line for their de­vel­op­ment so they can sup­plant us as the leader in the most im­por­tant tech­nolo­gies of the 21st cen­tury,” Ru­bio said at a For­eign Re­la­tions Com­mit­tee hear­ing on Asia pol­icy.

Trump had taken to Twit­ter on Sun­day with a pledge to help the com­pany, which has sus­pended its main op­er­a­tions, be­cause the penal­ties had cost too many jobs in China. It was a de­par­ture for a pres­i­dent who of­ten touts “Amer­ica First” poli­cies.

The Com­merce Depart­ment in April found ZTE had vi­o­lated a 2017 set­tle­ment cre­ated af­ter the com­pany vi­o­lated sanc­tions on Iran and North Korea, and banned U.S. com­pa­nies from pro­vid­ing ex­ports to ZTE for seven years.

U.S. com­pa­nies are es­ti­mated to pro- vide 25 per­cent to 30 per­cent of com­po­nents used in ZTE’s equip­ment, which in­cludes smart­phones and gear to build telecom­mu­ni­ca­tions net­works.

CYBERSNOOPING?

The sugges­tion out­raged mem­bers of Congress who have been press­ing for more re­stric­tions on ZTE. Some U.S. law­mak­ers have al­leged equip­ment made by ZTE and other Chi­nese com­pa­nies could pose a cy­ber se­cu­rity threat.

“Who makes uni­lat­eral con­ces­sions on the eve of talks af­ter you’ve spent all this time try­ing to say, cor­rectly in my view, that the Chi­nese have ripped off our tech­nol­ogy?” Se­na­tor Ron Wy­den, the se­nior Demo­crat on the Se­nate Fi­nance Com­mit­tee, which over­sees trade pol­icy, told Reuters.

Wy­den, who is also on the In­tel­li­gence Com­mit­tee, was one of 32 Se­nate Democrats who signed a let­ter on Tues­day ac­cus­ing Trump of putting China’s in­ter­ests ahead of U.S. jobs and national se­cu­rity.

The com­pany has de­nied wrong­do­ing.

Repub­li­can Rep­re­sen­ta­tive Mac Thorn­berry, chair­man of the House Armed Ser­vices Com­mit­tee, said at a Bloomberg event on Tues­day he did not ex­pect law­mak­ers would seek to re­move a ban on ZTE tech­nol­ogy from a must­pass an­nual de­fense pol­icy bill mak­ing its way through Congress.

“I con­fess I don’t fully un­der­stand the ad­min­is­tra­tion’s take on this at this point,” Thorn­berry said. “It is not a ques­tion to me of eco­nom­ics, it is a ques­tion of se­cu­rity.”

Another Repub­li­can, Se­na­tor John Kennedy, de­fended Trump, say­ing the pres­i­dent’s ap­proach is part of a larger set of ne­go­ti­a­tions with China.

“He didn’t get up one day and go, ‘I think I’ll change my mind on ZTE.’ I think it’s part of a larger is­sue, and part of a larger set of ne­go­ti­a­tions,” Kennedy told re­porters.

The ZTE logo is seen on an of­fice build­ing in Shang­hai, May 3.

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