President Trump says ZTE must change management and pay $1.3 billion to remain open
The ZTE saga just keeps going... and going... and going. After the United States Department of Commerce banned ZTE from importing US-made components, due to the company violating an agreement it made in 2017, ZTE shut down most operations while it fought to lift the ban. Earlier this month, President Trump announced he wanted to help ZTE, as part of negotiating a trade deal with China.
The move drew criticism from many government officials on both sides of the political spectrum, as this was the second time ZTE broke US law. Last week, the House Appropriations Committee doubled-down on the ban. In a series of tweets, Trump announced what ZTE will have to do for the ban to be lifted:
Senator Schumer and Obama Administration let phone company ZTE flourish with no security checks. 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....
— Donald J. Trump (@realDonaldTrump) May 25, 2018
...but complain and obstruct. They made only bad deals (Iran) and their so-called Trade Deals are the laughing stock of the world!
— Donald J. Trump (@realDonaldTrump) May 25, 2018
The requirement that ZTE buys US parts has drawn the most criticism, since the company already uses several US-made components, including Qualcomm processors and Intel-made modems. It was the inability to import these parts that put the company on the brink of closure. Marco Rubio, a Republican senator for Florida, is one official speaking out against the move:
Yes they have a deal in mind. It is a great deal... for #ZTE & China. #China crushes U.S. companies with no mercy & they use these telecomm companies to spy & steal from us. Many hoped this time would be different. Now congress will need to act. https://t.co/ETMUCe9ia6
— Marco Rubio (@marcorubio) May 25, 2018
ZTE is also still being accused by the federal government of spying on users, and the recent discovery of malware on some of the company's devices won't help quell those fears. Congress could potentially block Trump's order with a new law, and the Senate's pending National Defense Authorization Act includes a provision that would make rolling back the ZTE ban difficult.
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