Trump floated a plan to fine ZTE Corp instead of sanctions

Vastavam web: U.S. President Donald Trump on Tuesday floated a plan to fine ZTE Corp and shake up its management as his administration considered rolling back more severe penalties that have crippled the Chinese telecommunications company. Trump’s proposal ran into immediate resistance in Congress, where Republicans and Democrats accused the president of bending to pressure from Beijing to ease up on a company that has admitted to violating sanctions on Iran.

Speaking at the White House, Trump said U.S. technology companies have been hurt by an April Commerce Department decision that prohibits them from selling components to China’s second-largest telecommunications equipment maker. ZTE shut down most of its production after the ruling was announced. Trump said ZTE may instead face a fine of up to $1.3 billion, new management and a new board of directors, though it was not clear whether he had the legal authority to impose new financial penalties.

The Senate Banking Committee also voted 23-2 to make it harder for the president to modify penalties on Chinese telecommunications firms, drawing the support of liberal Democrats like Chris Van Hollen and conservative Republicans like Tom Cotton. The Republican-controlled House of Representatives is weighing a proposal that would block the sale of ZTE products and those of another Chinese company, Huawei Technologies [HWT.UL], until national security officials certify they are safe. It would be added to a defense-policy bill that Congress typically passes each year. According to sources familiar with the discussions, a proposed trade deal with China would lift a seven-year ban that prevents U.S. chipmakers and other companies from selling components to ZTE, which makes smartphones and telecommunications networking gear.

In return, China would eliminate tariffs on U.S. agriculture or agree to buy more farm products from the United States. The ban has threatened the viability of ZTE by cutting off access to companies that supply 25 percent to 30 percent of its components. Suppliers include some of the biggest U.S. tech companies, including Alphabet Inc’s Google, which licenses its Android operating system to ZTE, and chipmaker Qualcomm Inc