Trump signs defence Bill with watered-down China measures

US President Donald Trump speaking at the signing ceremony for the John S. McCain National Defence Authorisation Act at Fort Drum, on Monday. The final National Defence Authorisation Act strengthens the Committee on Foreign Investment in the United S
US President Donald Trump speaking at the signing ceremony for the John S. McCain National Defence Authorisation Act at Fort Drum, on Monday. The final National Defence Authorisation Act strengthens the Committee on Foreign Investment in the United States, which reviews proposed foreign investments to weigh whether they threaten national security.PHOTO: AGENCE FRANCE-PRESSE

$984b law is tougher on foreign investments but softens restrictions on ZTE and Huawei

FORT DRUM (New York) • United States President Donald Trump has signed a US$716 billion (S$984 billion) defence policy Bill that authorises military spending and includes watered-down controls on US government contracts with China's ZTE Corp and Huawei Technologies.

Mr Trump signed the law at the US Army's Fort Drum base in upstate New York on Monday on his way back to Washington after a 12-day working vacation at his golf club in New Jersey.

Vowing a new space force would give America dominance over rivals in China and elsewhere, Mr Trump said at Fort Drum: "Our competitors have begun weaponising space.

"It's not enough to have American presence in space. We must have American dominance in space," he said, as he warned of the threat from China and elsewhere, specifically mentioning a "new" Chinese military division that oversees space operations.

Some lawmakers wanted to use the Bill to reinstate tough sanctions on ZTE to punish the company for illegally shipping products to Iran and North Korea, but the restrictions included in the final National Defence Authorisation Act, or NDAA, that passed Congress were weaker than earlier versions of the Bill.

Mr Trump has lifted an earlier ban on US companies selling to ZTE, allowing China's second-largest telecommunications equipment maker to resume business and putting him at odds with both Republican and Democratic lawmakers.

Leaders of US intelligence agencies have said they are concerned that ZTE, Huawei and some other Chinese companies are beholden to the Chinese government or Communist Party, raising the risk of espionage. The White House opposed putting stronger measures against the companies in the Bill, and the measures were softened before lawmakers held their final vote.

The NDAA, however, does strengthen the Committee on Foreign Investment in the United States (CFIUS), which reviews proposed foreign investments to weigh whether they threaten national security.

NEED FOR SPACE FORCE

It's not enough to have American presence in space. We must have American dominance in space.

U.S. PRESIDENT DONALD TRUMP, warning of the threat from China and elsewhere.

It was seen as targeting China, which yesterday said the measure exaggerated Sino-US antagonism and that Beijing would take a close look at aspects that beef up the role of the CFIUS.

The Bill was named after Senator John McCain, 81, chairman of the Senate Armed Services Committee who, while fighting brain cancer at his home in Arizona, has become one of Mr Trump's most outspoken critics in Congress.

The President did not mention Mr McCain's name during his speech at Fort Drum.

Separately, the NDAA authorises spending US$7.6 billion for 77 F-35 Joint Strike Fighter jets, made by Lockheed Martin.

The Bill also directs the Secretary of Defence to study whether Turkey's planned deployment of the Russian-made S-400 missile defence system will risk the security of several US-made weapons used by Turkey, including the F-35 jet.

The mandate to produce a study came after an earlier version proposed to bar the delivery of F-35s to Turkey.

Even though Mr Trump said the Bill "is the most significant investment in our military and our war-fighters in modern history", former president Barack Obama's first three defence budgets were larger, when adjusted for inflation, according to Mr Todd Harrison at the Washington-based Centre for Strategic and International Studies.

REUTERS, AGENCE FRANCE-PRESSE, BLOOMBERG

A version of this article appeared in the print edition of The Straits Times on August 15, 2018, with the headline 'Trump signs defence Bill with watered-down China measures'. Print Edition | Subscribe