US President Donald Trump announced late last week a deal to save Chinese phone manufacturer ZTE despite opposition from lawmakers in both parties, marking the latest in a bizarre and basically incoherent stretch of policymaking from the current administration.
Photo: Getty
In a short series of tweets fired off Friday afternoon, Trump said that he will allow ZTE to “reopen with high level security guarantees, change of management and board.” The agreement will also supposedly require the Chinese phone maker to purchase parts from the US and pay a $US1.3 ($1.72) billion fine.
Senator Schumer and Obama Administration let phone company ZTE flourish with no security checks. I closed it down then let it reopen with high level security guarantees, change of management and board, must purchase U.S. parts and pay a $1.3 Billion fine. Dems do nothing….
— Donald J. Trump (@realDonaldTrump) May 25, 2018
…but complain and obstruct. They made only bad deals (Iran) and their so-called Trade Deals are the laughing stock of the world!
— Donald J. Trump (@realDonaldTrump) May 25, 2018
In typical Trump bluster, the president managed to bring up Democratic Senator Chuck Schumer, former President Barack Obama, and the Iran nuclear deal — all in the course of just two tweets that ostensibly were intended to announce an agreement with ZTE brokered by the Commerce Department, per The New York Times.
[referenced url=”https://gizmodo.com.au/2018/05/zte-ban-forces-telstra-to-pull-over-20-phones-and-broadband-devices-off-shelves/” thumb=”https://gizmodo.com.au/wp-content/uploads/2017/01/zte_axon_7-768×432.jpg” title=”ZTE Ban Forces Telstra To Immediately Drop Over 20 Phones And Broadband Devices” excerpt=”It appears Telstra has decided to drop its entire range of branded ZTE devices, after yesterday’s news of ZTE’s woes in the US that demanded the smartphone vendor cease all ‘major operating activities’.”]
The agreement seems to have a clear benefit for ZTE, which was getting ready to cease business operations entirely following a crackdown implemented by Trump’s own administration.
Just last month, the Commerce Department announced a seven-year ban on American companies selling parts to ZTE. The ban, which crippled a significant part of ZTE’s business, came just months after US intelligence agencies warned that Chinese smartphone makers including Huawei and ZTE may be using their technology to spy on people on behalf of the Chinese government.
Despite all of that, Trump is overruling, well, basically everyone — apparently in response to a plea from Chinese leader Xi Jinping. Under the agreement, ZTE not only will be able to buy parts from US companies again but will be required to. The details of the supposed “security guarantees” were not disclosed.
While ZTE and China likely welcome the announcement from Trump, basically no one on Capitol Hill outside of the Oval Office seems all that pleased. Lawmakers on both sides of the aisle took turns criticising the announcement.
Senator Marco Rubio took to Twitter to call the agreement “a great deal” for ZTE and China while suggesting it’s a bad one for the US. “China crushes U.S. companies with no mercy & they use these telecomm companies to spy & steal from us,” he wrote, calling on Congress to act to prevent the agreement.
Yes they have a deal in mind. It is a great deal… for #ZTE & China. #China crushes U.S. companies with no mercy & they use these telecomm companies to spy & steal from us. Many hoped this time would be different. Now congress will need to act. https://t.co/ETMUCe9ia6
— Marco Rubio (@marcorubio) May 25, 2018
“If the administration goes through with this reported deal, President Trump would be helping make China great again,” Senate Minority Leader Chuck Schumer, who caught flak from Trump for not being hard enough on ZTE, said on Twitter. “Both parties in Congress should come together to stop this deal in its tracks.”
If the administration goes through with this reported deal, President Trump would be helping make China great again. Would be a huge victory for President Xi, and a dramatic retreat by Pres Trump. Both parties in Congress should come together to stop this deal in its tracks. https://t.co/v6qNNa2MBy
— Chuck Schumer (@SenSchumer) May 25, 2018
The wildest part of the whole situation is Trump’s agreement to save ZTE might not even be possible.
Per the Washington Post, the Senate is set to vote on a National Defence Authorization Act that contains a provision that would make it difficult for the White House to undo restrictions on ZTE without congressional approval, setting up a potential showdown between Trump and Congress over an attempt to save Chinese jobs.