Trump Denies Reaching Deal With China on ZTE

Trump Denies Reaching Deal With China on ZTE

President Trump declared on Tuesday that he was not happy with how recent trade talks with China had gone, and said the United States had not reached a deal to suspend penalties on the Chinese telecom firm ZTE, disputing reports that the administration had decided to go easy on the company in return for trade concessions.

“There is no deal. We will see what happens,” Mr. Trump said in comments to reporters during a meeting between Mr. Trump and President Moon Jae-in of South Korea. Mr. Trump, when asked if he was happy with how recent trade meetings with China went, responded, “No.”

“China has made a fortune,” Mr. Trump said. “I’m not satisfied but we have a long way to go.”

The fate of ZTE has quickly become a key sticking point in negotiations with China, with lawmakers and others concerned that the administration would ease restrictions on the company following Mr. Trump’s suggestion in a Twitter message on May 13 that he was working with China’s president, Xi Jinping, to give ZTE “a way to get back into business, fast.”

“Too many jobs in China lost. Commerce Department has been instructed to get it done!” Mr. Trump added in the tweet.

That statement, and reports that the administration had discussed easing the penalties during a visit by Chinese trade negotiators last week, have sparked a backlash from lawmakers across the political spectrum. On Tuesday, senators took steps to limit Mr. Trump’s ability to ease restrictions on ZTE, voting to approve an amendment to pending legislation that would block the president from pardoning the company without first confirming to Congress that it was no longer violating the law.

In a 23-2 vote, lawmakers approved the amendment, which will now be included in a bill related to foreign investment controls that was offered by Senator Chris Van Hollen, Democrat of Maryland. The amendment would require the president to certify the company is no longer violating United States law, has not done so for a year, and is fully cooperating with investigators before changing its penalties. The bill is expected to come for a vote this summer.

Senator Marco Rubio, a Florida Republican, blasted the idea of a deal with ZTE, saying on Twitter: “Here is #ZTE timeline: Violated U.S. sanction laws & got caught lying & covering up. Paid $1billion fine & agreed to discipline employees. But then lied again & instead of discipline gave those employees bonuses. Now we are offering same deal of fine & employee discipline?”

ZTE, one of the world’s largest suppliers of telecommunications equipment, has been facing ruin ever since the United States Department of Commerce cut it off from American-made components last month. The department ordered the seven-year ban after the company admitted to lying to it about punishing employees who broke sanctions against Iran and North Korea.

The company had already agreed to a $1.2 billion fine for the violations last year. But without access to American microchips, software and other parts, its ability to manufacture smartphones and network gear is seriously crippled. Soon after the Commerce Department’s order, ZTE had shut its factory lines.

After three days of talks, the Trump administration said it was holding off on imposing new tariffs on China. But ZTE’s fate remained unclear. Mr. Trump’s economic team hinted at a way forward on the company in television interviews, although the message was muddled.

Steven Mnuchin, the Treasury secretary, said that the United States was not willing to revisit the penalties. But Larry Kudlow, Mr. Trump’s top economic adviser, said the company’s path to revival existed, although it ran through “very, very tough” punitive measures, including fines, compliance measures and changes in management and board membership.

Follow Raymond Zhong on Twitter: @zhonggg.

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