Trump administration has cut deal with China's ZTE

Source: Trump administration has cut deal with China's ZTE

Lawmakers in both parties have expressed concern over his decision to soften an earlier US action against ZTE over what his commerce secretary called "egregious" violations of sanctions on Iran and North Korea.

After the latest report, Republican Senator Marco Rubio tweeted, "Yes they have a deal in mind. Commerce Department has been instructed to get it done!"

Schumer added: "Both parties in Congress should come together to stop this deal in its tracks". The proposal goes against Congress, the majority of which believes that the Trump administration should not give into the pressure of easing up on ZTE since the company broke sanctions against North Korea and Iran. United States companies provide up to 30 percent of components used in ZTE's equipment.

News of the deal came a week before U.S. Commerce Secretary Wilbur Ross is scheduled to visit China for another round of talks amid ongoing trade frictions between the world's two largest economies.

Democratic Sen. Chuck Schumer of NY criticized the reported deal: "President Trump would be helping make China great again".

The reported deal with ZTE raised alarms among lawmakers from both sides of the aisle this week, including Sen. Many hoped this time would be different. "If President Trump won't put our security before Chinese jobs, Congress will act on a bipartisan basis to stop him", said Maryland Democratic Senator Chris Van Hollen, the author of the Senate provision.

The ban was placed on ZTE after its management failed to comply with punishments imposed on them by the United States following around 40 of its employees selling "hundreds of millions of [US] dollars'" worth of routers, microprocessors and servers to Iranian entities in violation of the US's Export Administration Act of 1979.

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On Thursday, the House passed its own defense policy bill with language banning the Pentagon from purchasing ZTE technology.

And a number of Democrats and Republicans have said products from ZTE, which is partly owned by the Chinese government, could also be used to collect information on US companies and steal intellectual property.

"Simply a fine and changing board members would not protect America's economic or national security, and would be a huge victory for President Xi [Jinping], and a dramatic retreat by President Trump", Schumer said in a statement. Mr. Ross and Mr. Mnuchin sought to assure the lawmakers that they were planning on harsh penalties for ZTE, and appealed to Republicans to dampen their public criticism so a deal could be reached, a person briefed on the discussions said.

Commerce Secretary Wilbur Ross is scheduled to travel to Beijing on June 2 for further discussions over China's aggressive push to challenge USA technological dominance.

News of the ZTE agreement came almost a week after the US and China suspended plans to impose tariffs on as much as $200 billion of each other's goods, putting them on the brink of a trade war.

This is a law enforcement action being handled by Commerce.

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