Trump Says 'There Has Been No Folding' Over Possible ZTE Deal
May 16 2018 - 2:51PM
Dow Jones News
By John D. McKinnon
WASHINGTON -- President Donald Trump sought to counter criticism
of his administration's efforts to ease tough U.S. penalties on
Chinese telecommunications giant ZTE Corp.
In a series of tweets Wednesday morning, Mr. Trump pushed back
against critics who have accused him of going soft on China this
week in the ZTE matter.
"There has been no folding as the media would love people to
believe, the meetings [with Chinese officials] haven't even started
yet!" the president tweeted. Chinese trade officials led by Vice
Premier Liu He are scheduled to be in Washington this week for
talks over U.S.-China trade.
Mr. Trump's tweets on Wednesday suggested that prospects are
dimming for a narrow bilateral trade deal floated earlier this week
in which the U.S. would ease penalties on ZTE in exchange for China
softening proposed tariffs on U.S. agricultural products. Instead,
Mr. Trump cast his efforts as part of a strategy to reach a broad
and more favorable trade deal with China, after years of U.S.
concessions.
"Nothing has happened with ZTE except as it pertains to the
larger trade deal," Mr. Trump wrote Wednesday. "Our country has
been losing hundreds of billions of dollars a year with
China...."
The Commerce Department announced the ZTE penalties in April,
after finding that the Shenzen-based company had failed to comply
with a settlement resolving an evasion of U.S. sanctions against
Iran and North Korea.
The U.S. penalties basically prohibit U.S. companies from
exporting crucial components needed for ZTE's smartphones. Commerce
Secretary Wilbur Ross has said that the department viewed the ZTE
penalties as an enforcement issue "separate from trade."
Mr. Trump floated the idea of easing the crippling ZTE penalties
in tweets on Sunday, saying that he and President Xi Jinping of
China were working together to give ZTE a way to "get back into
business, fast."
He added: "Too many jobs in China lost. Commerce Department has
been instructed to get it done!" At a briefing in Beijing on
Tuesday, U.S. Chamber of Commerce president Tom Donohue said that
Mr. Trump had had "a long conversation" with Mr. Xi before his ZTE
tweet on Sunday.
Mr. Ross said Monday that he would consider the question of
easing ZTE penalties "very, very promptly."
At the time of Mr. Trump's weekend tweet, the U.S. and China
were closing in on a relatively narrow deal that would grant ZTE a
reprieve in exchange for Beijing removing tariffs on billions of
dollars of U.S. agricultural products, according to people in both
countries briefed on the deal.
Those negotiations also were focused on easing China's
long-delayed antitrust review of a planned merger between Qualcomm
Inc. and NXP Semiconductors NV of the Netherlands. Chinese review
of that deal appeared to halt after the U.S. sanctions against ZTE
were announced.
But those negotiations over the narrow deal quickly drew a
flurry of criticism. Sen. Marco Rubio (R., Fla.) warned on Tuesday
that the recent discussions over ZTE showed that the U.S. was
"about to get out negotiated by #China again." He added:
"Apparently 'deal' is we lift sanctions imposed on ZTE for helping
Iran & N. Korea & they can resume spying & stealing our
intellectual property. In return China removes tariffs on U.S.
farmers who did no wrong."
Senate Democrats also have criticized the possible ZTE relief
effort as a move that could undermine national security.
"Offering to trade American sanctions enforcement to promote
jobs in China is plainly a bad deal for American workers and for
the security of all Americans," Senate Minority Leader Chuck
Schumer of New York, Sen. Ron Wyden of Oregon and Sen. Sherrod
Brown of Ohio wrote in a letter to Mr. Trump this week. National
security "must not be used as a bargaining chip in trade
negotiations," the senators wrote.
Write to John D. McKinnon at john.mckinnon@wsj.com
(END) Dow Jones Newswires
May 16, 2018 14:36 ET (18:36 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.