ZTE deal would lift sanctions for fine, management shuffle, administration tells lawmakers

WASHINGTON — President Trump has struck a deal with Chinese telecom company ZTE to lift U.S. trade restrictions that threatened to put the company out of business, a source familiar with the agreement said Friday.

Officials with the Commerce Department have briefed lawmakers on Capitol Hill about the outlines of the agreement, which includes a fine, a purge of ZTE’s management and a requirement that the company hire American compliance officers.

In exchange, the Trump administration would lift a ban on U.S. companies selling parts to the tech giant.

Trump asked his Commerce Department to investigate the restrictions on ZTE in April following a request from Chinese President Xi Jinping. Commerce imposed a seven-year ban after the company sold American-made products to Iran, a violation of U.S. sanctions.

Lawmakers on Capitol Hill blasted reports of the agreement as a giveaway to ZTE, and said the decision did not align with Trump’s tough trade stance on China. Earlier reports of a deal prompted bipartisan resistance in Congress, where lawmakers want assurances the company will honor sanctions.  

“If the administration goes through with this reported deal, President Trump would be helping make China great again,” Senate Minority Leader Chuck Schumer, D-N.Y., said in a statement.

Sen. Marco Rubio, R-Fla., wrote on Twitter that the deal was good only for China and ZTE.  

“China crushes U.S. companies with no mercy & they use these [telecom] companies to spy & steal from us,” he said.

The Commerce Department did not respond to requests for comment about the agreement. The White House issued a statement saying the administration "is making sure ZTE is held accountable for violating U.S. sanctions, pays a big price, and that we are protecting our security infrastructure and U.S. jobs. " 

The statement described the administration’s efforts on ZTE as “a law enforcement action being handled by Commerce.”

Trump has also frequently pointed out that U.S. companies are also harmed by the ban.

Trump has previously floated the idea of a fine as high as $1.3 billion and restructuring the company’s management. Independent experts have questioned whether those penalties will have any impact on a firm that is party state owned.