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Trump reaches deal with China to lift sanctions on Chinese tech giant ZTE despite blowback from Democrats, GOP

The Commerce Department will lift sanctions on Chinese phone maker ZTE in exchange for a shake up in the companies management. both Republicans and Democrats blasted the decision, saying it was weak and threatened national security.

  • The Commerce Department told members of Congress that the Trump administration reached a deal to lift sanctions on Chinese phone maker ZTE.
  • President Donald Trump also announced the easing of sanctions on Twitter later Friday.
  • In exchange for easing the sanctions, ZTE will be forced to "pay a bigger fine, have to hire American compliance officers, and they have to get rid of the current ZTE management team," according to a source familiar with the arrangement.
  • ZTE was facing sanctions after selling goods containing US parts to Iran and North Korea.
  • Republicans and Democratic lawmakers have blasted Trump's willingness to do a deal on ZTE.

The Trump administration has told Congress that the Commerce Department struck a deal with Chinese phone maker ZTE to ease sanctions against the tech giant in exchange for changes at the company.

According to a source familiar with the deal, the Commerce Department informed members of Congress that the current sanctions — a practice called a denial order which prevents ZTE from buying parts from US companies — will be lifted in exchange for changes at the company.

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"I closed it down then let it reopen with high level security guarantees, change of management and board, must purchase U.S. parts and pay a $1.3 Billion fine. Dems do nothing but complain and obstruct. They made only bad deals (Iran) and their so-called Trade Deals are the laughing stock of the world!"

ZTE was crippled following sanctions from the US. The company said in a statement on May 10 that due to the crackdown, "the major operating activities of the company have ceased."

The denial order was implemented after ZTE failed to respond to earlier sanctions that alleged the company sold goods containing US parts into Iran and North Korea, a violation of sanctions against those countries.

"If the administration goes through with this reported deal, President Trump would be helping make China great again," Schumer said. "Simply a fine and changing board members would not protect America's economic or national security, and would be a huge victory for President Xi, and a dramatic retreat by President Trump. Both parties in Congress should come together to stop this deal in its tracks."

A group of 27 senators from both parties signed on to a letter earlier in the week that, in part, warned the Trump administration against going easy on ZTE. The lawmakers pointed to national security officials' fear that ZTE could gain access to critical US technology and help bolster the Chinese government's efforts to modernize their defense capabilities.

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China worked to get the sanctions against ZTE lifted in trade negations with the Trump administration over the past two weeks. In exchange for lifting the sanctions, China is reportedly willing to lower tariffs on US agricultural products like pork and wine.

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