USA reaches agreement to lift ZTE ban with conditions

Elias Hubbard
May 26, 2018

Trump told Fox News on Thursday that he personally negotiated the $1.3 billion fine with Chinese President Xi Jinping in a phone call. Trump rejected the initial offer and provided a tough counteroffer.

The tweets came hours after a senior congressional aide told Reuters that a deal had been reached to allow ZTE to resume business with US companies pending a change in management and a major fine. As I wrote earlier this month, a company of its global scale brings significant revenue to USA businesses which, beyond more obvious consumer-facing companies, includes component-level partners like Qualcomm, who would be impacted if ZTE were to disappear tomorrow. The Hill reported that the provision was added to the 2019 National Defense Authorization Act (NDAA), which passed the House with overwhelming support, 351-66. United States companies provide up to 30 percent of components used in ZTE's equipment.

The reported deal with ZTE raised alarms among lawmakers from both sides of the aisle this week, including Sen. Finally, ZTE must move its management team around.

Also on Thursday, Ross told CNBC that the USA government was considering lifting the ban, saying: "If we do decide to go forward with an alternative, what it literally would involve would be implanting people of our choosing into the company to constitute a compliance unit".

Senate Minority Leader Chuck Schumer (D-New York) and Senator Chris Van Hollen (D-Maryland) have said Congress should stop Trump from letting ZTE do business in the US. Trump has said the new fine against ZTE could be about $1.3 billion. Would be a huge victory for President Xi, and a dramatic retreat by Pres Trump.

"As a favor to the president [of China], I am absolutely taking a look at it", Trump said this week about ZTE. The Trump administration has pushed China to help cut the $376 billion trade surplus with the U.S, with Beijing so far making only vague commitments to buy more US goods, including farm products and energy.

Ross plans to visit Beijing on June 2-4, and China has made saving ZTE one of its priorities. Trump has said helping ZTE would actually help American companies as well, as it would allow them to continue selling their products overseas.

This has led to showdowns with Japan, Turkey, Mexico, Canada and members of the European Union.

In a statement, a White House official said, "This is a law enforcement action being handled by Commerce".

Other reports by Click Lancashire

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