Donald Trump said he would let Chinese telecoms company ZTE “reopen” after paying a $1.3bn fine and meeting other conditions, despite intense criticism from Republicans and Democrats in Congress of the US president’s trade dealings with Beijing.
In messages posted on Twitter on Friday evening, Mr Trump blamed Democrats and the administration of his predecessor Barack Obama for having let ZTE “flourish with no security checks” for years.
“I closed it down then let it reopen with high level security guarantees, change of management and board, must purchase US parts and pay a $1.3 Billion fine. [Democrats] do nothing but complain and obstruct,” the president said. “They made only bad deals (Iran) and their so-called Trade Deals are the laughing stock of the world!”
The move comes as the Chinese government continues to press for a reprieve for ZTE from a ban on sourcing US parts imposed in April by the US Commerce department. The ban was introduced after ZTE broke the terms of a 2017 plea deal struck after it was caught violating US sanctions on Iran and North Korea.
According to people briefed on the situation, Chinese officials have demanded a change in the ZTE punishment as a condition of engaging in broader trade talks. Those are due to resume in Beijing on June 2 when Commerce secretary Wilbur Ross leads a delegation to China to negotiate new Chinese purchases of US agricultural and energy exports.
The accusation that the Obama administration did nothing over ZTE is at odds with the facts — the company was first prosecuted for violating sanctions by Obama officials. The Trump administration, in its third month in office in March 2017, announced a $1.2bn plea deal with ZTE based on years of work done by career officials at the Commerce department. When ZTE was caught violating the terms of that plea deal earlier this year, US authorities imposed the seven-year sourcing ban that had been suspended as part of the 2017 agreement.
Mr Trump drew criticism from both Republicans and Democrats this month for intervening on ZTE’s behalf after being asked to by Xi Jinping, just as the Chinese leader was preparing to send his top economic emissary, Liu He, to Washington for sensitive trade negotiations.
At the time Mr Trump tweeted: “Too many jobs in China lost. Commerce Department has been instructed to get it done!”
The perception that Mr Trump was using an enforcement case as a chip in a trade negotiation has attracted opposition from many supporters of his hardline trade policies, who see him as violating a campaign pledge to take on Beijing. The criticism on Capitol Hill has been led by Marco Rubio, the Republican senator and former presidential candidate.
Ahead of Mr Trump’s announcement on Friday, Mr Rubio vowed again to have Congress oppose any deal to overturn the Commerce department ban on ZTE.
Legislators in both the House of Representatives and the Senate have already passed bipartisan amendments that would limit the administration’s ability to lift the ban.
“Yes they have a deal in mind. It is a great deal . . . for #ZTE & China,” Mr Rubio tweeted after the New York Times first reported a deal had been struck. “#China crushes U.S. companies with no mercy & they use these telecomm (sic) companies to spy & steal from us. Many hoped this time would be different. Now congress will need to act.”
Whether Congress will be able to assemble a veto-proof majority to pass measures blocking a ZTE deal is unclear and the administration has been lobbying Republicans in recent days.
Chuck Schumer, the Democratic minority leader in the Senate, on Friday accused Mr Trump of betraying US national security.
“If the administration goes through with this reported deal, President Trump would be helping make China great again,” Mr Schumer said in a statement. “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, and a dramatic retreat by President Trump. Both parties in Congress should come together to stop this deal in its tracks.”
ZTE declined to comment.
Additional reporting by Xinning Liu in Beijing