Netizen 24 SGP: White House has deal to lift sanctions on China's ZTE: Report

By On May 25, 2018

White House has deal to lift sanctions on China's ZTE: Report

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The ZTE logo is seen on a building in Beijing.
Published24 min ago

WASHINGTON (AFP) - The White House says it has reached a deal with Chinese telecoms giant ZTE that would lift crippling sanctions slapped on the company, The New York Times reported on Friday (May 25).

The news comes as the US prepares to send a trade delegation back to Beijing next week to continue talks aimed at defusing a potentially serious trade dispute with China, after the countries exchanged huge tit-for-tat threats on imports.

The reported terms of the ZTE deal closely match the conditions US President Donald Trump and Commerce Secretary Wilbur Ross described earlier this week as a means for the firm to escape the export ban that nearly shuttered its operations.

However, it seemed likely to provoke a harsh reaction in Congress, as lawmakers have been critical of the administration for signalling it might ease the pressure on a company that violated US sanctions on Iran and North Korea and repeatedly lied to US officials.

ZTE was fined US$1.2 billion (S$1.6 billion) in March 2017, but last month Washington banned the sale of crucial US components to the company after finding it had lied multiple times and failed to take actions against employees responsible for sanctions violations.

Under the new deal brokered by the Commerce Department, according to the Times, ZTE would pay a substantial fine, hire American compliance officers to be placed at the firm and make changes to its current management team.

Even while US officials said the ZTE penalties were a national security issue separate from the trade talks with Beijing, Trump said Tuesday he was looking at easing the tough sanctions on ZTE "as a favour" to Chinese President Xi Jinping.

Trump said he envisioned a new fine on the company of as much as US$1.3 billion as well as a manageme nt shake-up and strict new rules.

ALTERNATIVES

On Thursday, Ross said that at Trump's request, his department was looking at alternatives to the harsh penalty he choose to impose.

But, he said, "if we do decide to go forward with an alternative, what it literally would involve would be in planting people of our choosing into the company to constitute a compliance unit and that unit would report back to the Department of Commerce."

Top Republican and Democrat senators have denounced the compromise and one even vowed to block it.

The reprieve for ZTE came just after Washington and Beijing called a halt to a spiralling trade dispute sparked by US accusations of China's unfair practices and the alleged theft of US technology, with Washington suspending plans to impose tariffs on as much as US$150 billion in Chinese imports.

Trump also faced accusations of quid-pro-quo after pledging to soften sanctions on ZTE just days afte r AFP reported a Chinese state firm would pour cash into a Trump-tied real estate venture in Indonesia.

Lawmakers were incensed by Trump's offer last week to rescue the company and Chinese jobs, which came via Twitter in the midst of the trade talks with Beijing. The president angrily denied back-pedalling.

Topics:
  • US NEWS
  • CHINA

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