WASHINGTON — The White House on Wednesday defended President Donald Trump’s decision to allow Chinese telecom giant ZTE to resume buying component parts from the U.S. — a move the Republican-led Senate is working to reverse.
In a statement, White House spokesman Hogan Gidley pointed to “massive penalties” imposed on ZTE as part of what he called “an historic enforcement action” by the Commerce Department. The changes, he said, “will ensure ZTE pays for its violations and gives our government complete oversight of their future activity without undue harm to American suppliers and their workers.”
The deal announced last week with China allows ZTE Corp. to stay in business in exchange for paying a $1 billion penalty, replacing its top managers and agreeing to let U.S. regulators monitor its operations. The fine comes on top of $892 million ZTE has already paid for breaking U.S. sanctions by selling equipment to North Korea and Iran. ZTE must also put $400 million in escrow — a sum that it would forfeit if it ever violated the agreement.
Trump has drawn fire from Congress for intervening. The Senate has been trying to reverse the deal by tucking a provision into a must-pass defense package, which includes pay raises for the troops. The defense bill is expected to pass the Senate later this week, and senators are unlikely to remove the ZTE provision. But a showdown could come in the House, which already passed its version of the defense bill without it. The bills will need to be merged.
