USA reaches agreement to lift ZTE ban with conditions

  • USA reaches agreement to lift ZTE ban with conditions

USA reaches agreement to lift ZTE ban with conditions

The Trump administration has told Congress that it's reached a deal that would allow Chinese telecommunications giant ZTE Corp.to stay in business, a source familiar with the talks who spoke on condition of anonymity to discuss a confidential matter said Friday.

The president's earlier proposal ran into immediate resistance in Congress, where Democrats and Trump's fellow Republicans accused the president of bending to pressure from Beijing to ease up on a company that has admitted to violating sanctions on Iran.

Headquartered in Shenzhen, China, ZTE was handed a seven-year ban on buying United States technology components in mid-April.

After further negotiations, they settled at a $1.3 billion fine, according to the president.

In addition, the U.S. will install United States compliance officers within ZTE to make sure things remain as they should.

President Trump said Chinese leader Xi Jinping has personally asked him to intervene to help ZTE, and he has said that he would. The Commerce Department would then lift an order preventing ZTE from buying USA products.

Florida Republican Sen. Marco Rubio also came out against it, calling it a "great deal. for #ZTE & China".

In an overwhelming bipartisan vote Thursday, the House passed a defense bill that included language prohibiting the Pentagon from renewing contracts with companies doing business with ZTE.

After negotiating the terms, the parties have come to the tentative deal that is being reported Friday.

Lawmakers have warned the administration not to go easy on a company that brazenly violated US sanctions against two rogue nations that were pursuing nuclear weapons production.

Rubio, as well as Democratic Senators Chuck Schumer and Chris Van Hollen, said Congress should act to stop Trump from letting ZTE get back into business.

William Evanina, the acting director of the National Counterintelligence and Security Center, said at his May 15 confirmation hearing that he would not use a ZTE phone nor recommend that anyone in a sensitive position in government use one. US companies provide an estimated 25 percent to 30 percent of components in ZTE's equipment. "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".

Ross is scheduled to travel to Beijing next week to accelerate talks, particularly focused on securing a commitment from China to purchase more USA goods. In doing two, the two nations pulled back from the brink of a trade war over Chinese demands that US companies hand over some of their technology as the price of doing business in China.

ZTE needs USA components for its mobile phones and network equipment.

"ZTE, the large Chinese phone company, buys a big percentage of individual parts from USA companies".

Shares of ZTE's USA suppliers traded higher on Friday.