Trump Says 'There Has Been No Folding' Over Possible ZTE Deal

Date : 05/16/2018 @ 6:51PM
Source : Dow Jones News

Trump Says 'There Has Been No Folding' Over Possible ZTE Deal

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


(END) Dow Jones Newswires

May 16, 2018 14:36 ET (18:36 GMT)

Copyright (c) 2018 Dow Jones & Company, Inc.

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