ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronEye IconIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailPositive ArrowIcon PrintTitle ChevronIcon Twitter
Trade war

Trump floats ZTE compromise but faces opposition in Congress

US works toward ending ban in favor of $1.3bn fine and management changes

A woman enters a service center of ZTE in Hangzhou, Zhejiang province, China.   © Reuters

NEW YORK -- U.S. President Donald Trump suggested on Tuesday levying a substantial new fine against Chinese smartphone maker ZTE -- as high as $1.3 billion -- and forcing management changes at the company in exchange for lifting American sanctions, as part of a broad trade deal with China.

But such a deal faces opposition from Congress, where a bipartisan group of senators joined hands on Tuesday asking the administration not to compromise on export control and sanctions.

Trump, in remarks ahead of his summit with South Korean President Moon Jae-in, called the review of the ZTE ban a "favor" to Chinese President Xi Jinping.

Trump said that Xi had asked him to review the seven-year ban that blocked the company from acquiring American technology, and that "as a favor to the president," he was "absolutely taking a look at it."

While saying that ZTE was "caught ... doing bad things" -- in reference to the company evading U.S. embargoes and shipping equipment to Iran -- Trump acknowledged that the ban had hurt many American suppliers.

"I envision a very large fine" that could reach $1.3 billion, Trump said. "I envision, perhaps, new management, a new board of directors, very tight security rules" under which ZTE would restart its U.S. operations.

A group of senators led by Republicans John Cornyn and Marco Rubio as well as Democrats Chuck Schumer and Dianne Feinstein said they sent a letter to the treasury secretary, commerce secretary and U.S. trade representative urging the administration to protect national security interests when negotiating the U.S.-China trade relationship.

"There can be no question that China seeks to surpass the U.S. both economically and militarily and become the world's foremost superpower, and neither the Federal Government nor private U.S. companies should aid and abet that effort," the senators wrote. "Export control and sanctions laws should not be negotiable."

In his remarks on Tuesday, Trump said he is "not satisfied" with how the U.S.-China trade talks unfolded last week, adding that the eventual outcome of the negotiations "could be much different" from what the two sides have achieved so far.

The president said he will seek "a much better deal for the United States" going forward. In a joint statement released on Saturday, China agreed to "significantly increase" purchases of U.S. goods and services, but gave no target figure.

Trump warned Beijing that the U.S. may opt to trigger sanctions, as cited under Section 301 of the Trade Act of 1974, if the talks do not advance.

"We can do a 301 ... where we don't need China, where we can just say, 'Look, this is what we want. This is what we think is fair.' That's always a possibility," he said.

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this monthThis is your last free article this month

Stay ahead with our exclusives on Asia;
the most dynamic market in the world.

Stay ahead with our exclusives on Asia

Get trusted insights from experts within Asia itself.

Get trusted insights from experts
within Asia itself.

Try 1 month for $0.99

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this month

This is your last free article this month

Stay ahead with our exclusives on Asia; the most
dynamic market in the world
.

Get trusted insights from experts
within Asia itself.

Try 3 months for $9

Offer ends January 31st

Your trial period has expired

You need a subscription to...

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers and subscribe

Your full access to Nikkei Asia has expired

You need a subscription to:

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers
NAR on print phone, device, and tablet media

Nikkei Asian Review, now known as Nikkei Asia, will be the voice of the Asian Century.

Celebrate our next chapter
Free access for everyone - Sep. 30

Find out more