President Donald Trump’s administration is telling Congress it has come to an agreement to boost Chinese telecommunications company ZTE, The New York Times and Reuters reported.
As part of the deal, ZTE would pay a financial penalty, revamp its management and hire American compliance officers, the Times reported, citing a person familiar with the matter. The U.S. would scrap a ban on the company buying American products under the agreement, the newspaper said. It is unclear how firm the reported deal is at this point.
The outline reported by the Times appears to fall in line with some steps Trump said he could take to help ZTE get back into business. On Tuesday, the President said he envisioned “a large fine of more than a billion dollars, new management, a new board and very, very strict security rules.” He added that he would want ZTE to “buy a big percentage of their parts and equipment from American companies.”
An agreement to revive ZTE, which has argued the U.S. penalties would cripple its operations, could possibly help critical trade talks between the U.S. and China. Trump has called the ZTE negotiations part of broader talks to address alleged Chinese trade abuses, though top advisors have labeled ZTE an “enforcement” issue. Washington and Beijing are trying to cement a deal that would avoid potentially damaging tariffs.
Trump has said he agreed to help the firm, a major smartphone supplier in the American market, at the request of Chinese President Xi Jinping.
The prospect of a deal to aid the phone maker has prompted bipartisan criticism from Capitol Hill. Many lawmakers have argued any deal would hurt national security because the U.S. government was punishing the firm for violating sanctions on Iran and North Korea. Some members of Congress have also contended the firm’s equipment poses a cybersecurity risk.
Earlier this week, the Senate Banking Committee overwhelmingly passed an amendment introduced by Sen. Chris Van Hollen, D-Md., to limit Trump’s ability to remove the penalties on ZTE. Following the Times report Friday, Van Hollen told NBC News “there’s strong bipartisan resistance to this idea of the president trading away” national security considerations.
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