Trump Mulls $1.3 Billion Fine for China's ZTE Telecom Giant

Lawrence Kim
May 23, 2018

Trump reversed the action via tweet a week ago, declaring that it would cost "too many jobs in China".

"I think Sec. Mnuchin is well aware of decisions being made by the Trump administration with regard to ZTE".

The White House said in a statement Monday that "the president and his entire administration are committed to ending decades of unfair and illegal trading practices that harm our farmers, workers and many other parts of the USA economy". The Chinese see the current battle as similar to the one they had to fight when the Soviets abruptly cut off aid in the 1960s.

The Commerce Department had imposed the sanctions and banned the company from buying USA components after the company admitted to breaking us sanctions by selling equipment to North Korea and Iran.

Mr Trump said the current penalty, which led ZTE to halt major operations, has hurt U.S. firms that sell to it.

News broke this morning that Commerce might indeed be about to back down, at the White House's behest. But by allowing ZTE to return to business as usual, the U.S. is putting the trade war with China on hold.

Perhaps this unfavorable truce was the best Mr. Trump could achieve at a time when he also needs Mr. Xi's help dealing with North Korea.

"What I envision is a very large fine of more than US$1 billion". Details of the deal are still being worked out, it added. He said the punishment was never meant to put the company out of business. That's what Rubio's anxious about. What lesson will China and its firms learn if they can break agreements with the US and then be allowed to resume those agreements later with little or no penalty for the earlier breach?

Nothing's set in stone yet, though.

As the reported terms of the Trump administration's truce with China show, however, Mr. Trump to date seems to have spent American leverage on a predictably futile effort to achieve large short-term reductions in the $375 billion annual US merchandise trade deficit with China. It's a national security matter. He said he might impose a bigger penalty on the company instead. Suddenly sanctions, America's most potent tool for imposing its will internationally short of war, won't be as much of a threat as they are now and bad actors will be emboldened to act out against US interests.

Rubio tweeted on Tuesday: "Can't emphasize enough what a crisis this is". The Banking Committee also approved a bill by Sen.

That drew a quick response from Republicans and Democrats in Congress. It passed through the panel easily by a 23 to 2 margin in a bipartisan rebuke to the administration's possible plans...

He said it was a punishment "in name only" and warned the president against taking a softer stance on ZTE in exchange for promises of increased Chinese purchases of USA goods.

Normally I'd be skeptical of the GOP joining with Dems to try to rein Trump in, but in fairness to them, they've done it once before during his presidency in a high-profile way.

Economists are expecting construction activity to increase slightly by 1.3 per cent, following a 19.4 per cent plunge in the final quarter of previous year.

The potential reprieve has prompted critics, including some members of his own party, to accuse Mr Trump of caving in to a company that has raised national security concerns. "We have a long way to go", Mr. Trump said of his push to trim America's annual $375 billion trade deficit with China.

"This affair is a screaming violation of the US Constitution's emoluments clause, which flatly prohibits the acceptance of gifts and benefits from governments in the absence of congressional consent", Robert Weissman, president of Public Citizen, a consumer advocacy organisation frequently skeptical of free trade agreements.

US Treasury Secretary Steven Mnuchin on Monday denied a quid pro quo and maintained that ZTE discussions are separate from trade talks. Last summer he was sharply contradicted by Trump after he attempted to strike a deal with China to reduce its steel production capacity. Via Mediaite, here's his old buddy Scarborough dunking on him over it.

Other reports by Click Lancashire

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