Trump's pledge to help China's ZTE spurs backlash in Washington

The ZTE Corporation logo at the company's headquarters in Shenzhen, Guangdong Province, China, on May 14, 2018.
The ZTE Corporation logo at the company's headquarters in Shenzhen, Guangdong Province, China, on May 14, 2018. PHOTO: EPA-EFE

WASHINGTON (REUTERS) - President Donald Trump's pledge to help a Chinese telecommunication company that broke US sanctions law sparked a backlash from lawmakers who said the move could weaken the US hand in upcoming trade talks with Beijing.

Trump said on Sunday (May 13) that he was working with Chinese President Xi Jinping to help ZTE Corp revive jobs after the company ran afoul of US economic sanctions on Iran by selling telecom equipment made with US components.

His decision angered lawmakers from both parties, who said it looked like he was backing down ahead of high-stakes trade talks this week in Washington between the United States and China.

"One of the few areas where the president and I agreed, and I was vocally supportive, was his approach towards China. But even here he is backing off, and his policy is now designed to achieve one goal: make China great again," said Senate Democratic Leader Chuck Schumer.

Republican Senator Marco Rubio cited concerns about Beijing using telecom companies like ZTE , China's second-largest maker of telecommunications equipment, for espionage.

"I hope this isn't the beginning of backing down to China,"Rubio said on Twitter, saying Chinese competition had "ruined"many US companies.

"We are crazy to allow them to operate in US without tighter restrictions," Rubio said.

 

In April, the Commerce Department banned US companies from selling to ZTE for seven years after it illegally shipped US goods to Iran and North Korea. The company shut its main business operations last week.

"Too many jobs in China lost. Commerce Department has been instructed to get it done!" Trump wrote on Twitter. The White House said later that Trump expected Commerce Secretary Wilbur Ross to make an independent decision.

Ross is slated to make public remarks on Monday at an event with journalists at 1 pm ET (1am Singapore time).

ZTE, whose shares remain suspended, has not commented on Trump's statement.

Chinese Foreign Ministry spokesman Lu Kang on Monday said China "greatly appreciates the positive US position on the ZTE issue" and that Chinese Vice Premier Liu would visit Washington from Tuesday to Saturday.

Sources briefed on the matter said Beijing had demanded the ZTE issue be resolved as a prerequisite for broader trade negotiations.

Democratic Senator Ron Wyden questioned the timing of Trump's remark. "Unilateral concessions before an upcoming trade negotiation. This may be the art of the deal for China but it's a big loser for American workers, companies, and national security," he said.