The Trump administration told lawmakers Friday that it had reached a deal that would keep the Chinese telecom firm ZTE alive, possibly clearing the way for the United States to make progress in its high-stakes trade talks with China next month.
Under the agreement, ZTE would oust its management team, hire American compliance officers to be placed at the firm and pay a fine. The fine would come on top of the roughly $1 billion ZTE has paid for selling equipment to North Korea and Iran in violation of U.S. sanctions, according to news reports.
In return, the Commerce Department would lift a seven-year ban on ZTE’s purchase of components from U.S. companies. The Chinese company depends on these components to make its products, and the ban, imposed earlier this month, threatened to put ZTE out of business.
On Friday evening, President Donald Trump lashed out at Democratic lawmakers and confirmed the news of the deal on Twitter.
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
Last month, the U.S. Commerce Department ruled that the company had failed to live up to the terms of an agreement over ZTE’s evasion of sanctions.
News of the ZTE agreement came nearly a week after the U.S. and China suspended plans to impose tariffs on as much as $200 billion of each other’s goods, putting them on the brink of a trade war.
Commerce Secretary Wilbur Ross is scheduled to travel to Beijing on June 2 for further discussions about China’s aggressive push to challenge U.S. technological dominance.