Trump faces backlash over possible $1.3bn ZTE fine

Brunilde Fioravanti
Mag 23, 2018

Trump reversed the action via tweet a week ago, declaring that it would cost "too many jobs in China".

Accusing him of getting outmaneuvered at the bargaining table by China may be grounds for a snotty presidential retort or two on Twitter.

That prompted former chief strategist and China hawk Steven Bannon to complain in a Bloomberg interview that the president had "changed the dynamic regarding China but in one weekend Secretary Mnuchin has given it away". Suppliers include some of the biggest USA tech companies, including Alphabet Inc's Google, which licenses its Android operating system to ZTE, and chipmaker Qualcomm Inc.

The president has demanded a $200 billion cut in the trade deficit by the year 2020, threatening a round of punitive tariffs if Beijing doesn't comply.

The Commerce Department last month blocked China's ZTE from importing American components for seven years, accusing it of misleading US regulators after it last year settled charges of violating sanctions against Iran and North Korea. But then lied again & instead of discipline gave those employees bonuses.

"By shutting them down, we're hurting a lot of American companies, really good American companies", Trump said.

News broke this morning that Commerce might indeed be about to back down, at the White House's behest. One of China's trade demands in talks with the US this month included removing a ban on selling integrated circuits to the Asian nation. But Trump did slap tariffs on them right around the time that Commerce slapped its sales prohibition on ZTE. The two sides also agreed to reduce the trade imbalance between China and the USA but did not reveal specifics.

Senator Marco Rubio, a Florida Republican who in recent days has been critical of how the Trump administration is handling trade issues with China, said that if the Journal story is true it means the USA has "surrendered" to the Chinese on ZTE issues.

In exchange for Trump's removal of the ban, ZTE will make major changes in management, board seats and potentially pay fines, according to the Journal. Details of the deal are still being worked out, it added.

"I can assure you that whatever the Commerce Department decides, the intel community has been part of the briefings and we will ensure that we enforce national security issues", Mnuchin said. That's what Rubio's anxious about. But he said that the sanctions were not meant to bankrupt the Chinese firm, which depends on USA suppliers.

Nothing's set in stone yet, though.

The ZTE talks occur after the US 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 previous year said it intends to ease restrictions on foreign ownership of financial companies. Suddenly sanctions, America's most potent tool for imposing its will internationally short of war, won't be as much of a threat as they are now and bad actors will be emboldened to act out against USA interests. The Banking Committee also approved a bill by Sen.

Not everybody is happy about the outcome, and Republican Senator Marco Rubio is one of the most vocal critics of Trump's decision to save ZTE.

Normally I'd be skeptical of the GOP joining with Dems to try to rein Trump in, but in fairness to them, they've done it once before during his presidency in a high-profile way.

Trump floated a plan to fine ZTE and shake up its management after his administration considering rolling back more severe penalties imposed for violating United States sanctions by shipping goods to Iran.

"The reality is we should not be trading away national security for some non-security related issue", Van Hollen said. He said Congress will begin working on a veto-proof legislative fix. After pretty clearly violating USA trade restrictions with Iran, ZTE was heavily sanctioned earlier this year, which didn't make China happy, either.

Senate Democratic Leader Chuck Schumer on Tuesday castigated the Trump administration's plan to review penalties on ZTE, saying on the Senate floor that the action signals to China that "they can roll over us on issue after issue".

There's a "handshake deal" on ZTE between U.S. Treasury Secretary Steven Mnuchin and Chinese Vice Premier Liu He.

As for Rubio's claim that Team Trump is being outnegotiated by China, read this.

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