U.S. President Donald Trump has suggested a plan to fine ZTE and change its management as part of the strategy to roll back severe penalties on the China-based telecommunications company, Reuters reported.
Republicans and Democrats responded to the new development. They accused the president of bending to pressure from Beijing to ease up on a wireless infrastructure company that has admitted to violating sanctions on Iran.
Speaking at the White House, Trump said U.S. technology companies have been hurt by an April Commerce Department decision that prohibits them from selling components to China’s second-largest telecommunications equipment maker. ZTE shut down most of its production after the ruling was announced.
The U.S. Commerce Department’s ban has threatened the viability of ZTE by cutting off access to companies that supply 25 percent to 30 percent of its components. Suppliers include some of the biggest U.S. tech companies, including Google and chipmaker Qualcomm.
The U.S. Department of Defense has also stopped selling ZTE’s mobile phones and modems in stores on its military bases, citing potential security risks.
Trump said ZTE may instead face a fine of up to $1.3 billion, new management and a new board of directors, though it was not clear whether he had the legal authority to impose new financial penalties.
Some 26 senators, including the chamber’s top Democrat, Chuck Schumer, and No. 2 Republican, John Cornyn, urged the administration in a letter to keep penalties in place for “serial and pre-meditated violators of U.S. law, such as ZTE.”
The Senate Banking Committee also voted 23-2 to make it harder for the president to modify penalties on Chinese telecommunications firms, drawing the support of liberal Democrats like Chris Van Hollen and conservative Republicans like Tom Cotton.
The Republican-controlled House of Representatives is weighing a proposal that would block the sale of products from ZTE and Huawei Technologies, another Chinese company, until national security officials certify they are safe. It would be added to a defense-policy bill that Congress typically passes each year.
Reuters reported that a proposed trade deal with China will lift a 7-year ban that prevents U.S. chipmakers and other tech companies from selling components to ZTE. In return, China would eliminate tariffs on U.S. agriculture or agree to buy more farm products from the United States.
