The Trump administration told lawmakers the USA government has reached a deal to put Chinese telecommunications company, ZTE Corp, back in business after it pays a significant fine and makes management changes, a senior congressional aide said on Friday.
At the time, Mr. Trump insisted there wasn't a deal but said he "envisioned" a deal involving a big fine and other conditions. I closed it down then let it reopen with high level security guarantees, change of management and board, must purchase USA parts and pay a $1.3 Billion fine.
The Commerce Department last month blocked ZTE from importing American components for seven years, having concluded that ZTE deceived USA regulators after it settled charges last year of violating sanctions against Iran and North Korea.
To recap, after warnings from intel leaders about using ZTE phone and the implementation of a USA export ban, the President tweeted, "President Xi of China, and I, are working together to give massive Chinese phone company, ZTE, a way to get back into business, fast". Chinese officials have complained to the White House that the Commerce Department restriction was effectively forcing ZTE out of business, as the company depends on US parts.
The fine would come on top of the roughly $1 billion ZTE has already paid for selling equipment to North Korea and Iran in violation of US sanctions.
The new White House offer to China has only further incensed lawmakers, who have expressed concern over the prospect of releasing the USA government's grip on ZTE. Without crucial hardware components, ZTE's factories and most of its 75,000 employees are sitting idle. Trump has negotiated a $1.3 billion fine with the Chinese President over a phone call, as per Fox News.
ZTE, which is publicly traded but whose largest shareholder is a Chinese state-owned enterprise, agreed past year to pay a almost $900 million penalty and open its books to a US monitor. That bill was approved after the administration signaled it was reconsidering penalties against the company.
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Trump asked Xi what he was prepared to do, the president said - and Xi replied that he was willing to have ZTE pay a fine of USD 500 million dollars for the embargo violations, change the management and replace the board.
Senate Minority Leader Charles E. Schumer said the deal, if Mr. Trump goes through with it, "would be helping make China great again".
Schumer added: "Both parties in Congress should come together to stop this deal in its tracks".
Trump's decision to allow the company to reopen defied warnings from lawmakers on both sides of the aisle, who asserted that ZTE should be punished for violating USA law.
The telecom company has become entwined in high-stakes trade talks between the USA and China.
Ross plans to visit Beijing on June 2-4, and China has made saving ZTE one of its priorities.