President Donald 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,” Trump said in comments to reporters during a meeting between Trump and President Moon Jae-in of South Korea. Trump, when asked if he was happy with how recent trade meetings with China went, responded, “No.”
“China has made a fortune,” 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 after 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!” 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 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 Sen. Chris Van Hollen, D-Md. The amendment would require the president to certify that the company was no longer violating U.S. law, had not done so for a year and was fully cooperating with investigators before changing its penalties. The bill is expected to come to a vote this summer.
Sen. Marco Rubio, R-Fla., 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 U.S. 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 U.S. microchips, software and other parts, its ability to manufacture smartphones and network gear is seriously crippled. Soon after the Commerce Department’s order, ZTE 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. Trump’s economic team hinted at a way forward on the company in television interviews, although the message was muddled.
Treasury Secretary Steven Mnuchin said that the United States was not willing to revisit the penalties. But Larry Kudlow, 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.