Trump says ZTE to pay fine to reopen

US President Donald Trump said the US would allow Chinese telecommunications equipment maker ZTE Corp (中興通訊) to remain in business after paying a US$1.3 billion fine, changing its management and board and providing “high-level security guarantees.”

In a tweet on Friday evening, Trump confirmed a deal that his administration had outlined for members of the US Congress, according to two people familiar with the matter.

Lawmakers in both parties have expressed concern over his decision to soften an earlier US action against ZTE over what US Secretary of Commerce Wilbur Ross called “egregious” violations of sanctions on Iran and North Korea.

Trump took a jab at Democrats in his tweet, saying that US Senate Minority Leader Chuck Schumer and former US president Barack Obama “let phone company ZTE flourish with no security checks.”

Under the deal for ZTE to resume operations, it would also hire US compliance officers to monitor its operations, the anonymous people said.

Once ZTE complies, the US Department of Commerce would lift an order under which the company had been cut off from US suppliers including Qualcomm Inc, effectively shutting down its business.

A representative for ZTE declined to respond in a text message. The Chinese Ministry of Commerce did not immediately reply to a faxed inquiry.

Trump earlier this week said he ordered a reconsideration of penalties against ZTE as a favor to Chinese President Xi Jinping (習近平), as the company estimated losses of at least US$3.1 billion from the US technology ban.

The plan is further inflaming tensions between the White House and Congress over trade policy in a week when Republicans blasted the administration for contemplating tariffs on auto imports.

“Yes, they have a deal in mind. It is a great deal ... for #ZTE & China,” Senator Marco Rubio, a Florida Republican, tweeted on Friday.

Schumer said that “both parties in Congress should come together to stop this deal in its tracks.”

The US Senate on Thursday released a defense policy bill containing a provision requiring Trump, before making any ZTE deal, to certify with Congress that ZTE has not violated US law for the past year and is cooperating with US investigations.

“ZTE presents a national security threat to the United States — and nothing in this reported deal addresses that fundamental fact. 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.

It is unclear if Congress will be able to muster veto-proof majorities needed to block the president on ZTE.

US Secretary of the Treasury Steven Mnuchin and Ross on Wednesday held a meeting with Republican senators laying out the ZTE proposal.

People briefed on the meeting said lawmakers were told to give the administration room to negotiate the matter and asked them to tone down public criticism of the deal.

After the briefing, John Cornyn of Texas, the No. 2 Republican in the Senate, expressed support for placing compliance officers at ZTE.

“That would be pretty remarkable,” he told reporters. “Having somebody inside the company to observe what’s going on would be very valuable.”

The US House of Representatives earlier on Thursday passed its own defense policy bill with language banning the US Pentagon from purchasing ZTE technology.