Security Experts:

U.S. Lawmakers Denounce Purported ZTE Deal

The United States and China have a tentative deal to save embattled Chinese telecom company ZTE, days after the two nations announced a truce in their trade standoff, The Wall Street Journal reported Tuesday.

The report sparked an immediate negative reaction on Capitol Hill, where top Republican and Democrat senators denounced it.

Details remain to be hammered out, but according to the general outlines of the agreement, Washington would lift a crippling ban on selling US components to the company, which in turn would make major changes in its management, executive board and possibly pay additional fines, according to the report.

The company had faced collapse due to the US ban, which resulted from its violations of US sanctions against Iran and North Korea.

Washington and Beijing on Saturday called a halt to a spiraling trade dispute sparked by US accusations of unfair trade practices and the alleged theft of US technology, suspending plans to impose tariffs on as much as $150 billion in Chinese imports.

In a series of tweets, top Republican Senator Marco Rubio of Florida, who chairs a key subcommittee on foreign relations, denounced the move, vowing lawmakers would work on "veto-proof legislation" to stop the deal.

"If this is true, then the administration has surrendered to #China on #ZTE," Rubio wrote.

"Making changes to their board & a fine won't stop them from spying & stealing from us."

Minority Leader Chuck Schumer, Democrat of New York, said the proposed arrangement would "do nothing to protect American national or economic security and are simply a diversion from the fact that we have lost."

- Mnuchin on the Hill -

Schumer said in a statement the White House and Treasury Secretary Steven Mnuchin had been duped by China.

"President Xi has played President Trump and Secretary Mnuchin."

ZTE was fined $1.2 billion in March 2017 but last month it was prohibited from receiving needed US parts after the Commerce Department found the company had lied multiple times and failed to take actions against employees responsible for sanctions violations on Iran and North Korea.

Trump has also faced accusations of quid-pro-quo after pledging to soften sanctions on ZTE just days after AFP reported a Chinese state firm would pour cash into a Trump-tied real estate venture.

According to media reports, lawmakers were incensed last week by Trump's offer to rescue the company, which came via Twitter in the midst of the China trade talks. The president angrily denied back-pedaling.

And in testimony before the Senate on Tuesday, Mnuchin said the administration's primary goal was safeguarding US interests and denied and quid pro quo.

"The objective was not to put ZTE out of business. The objective was to make sure they abide by our sanctions programs," said Mnuchin said.

"I can assure you anything that they consider will take into account the very important national security issues and those will be addressed."

Mnuchin defended the Trump's trade policy, saying he has been "more aggressive than any previous president ever," and is not looking for "short-term gains" but to "create a level playing field and make sure US technology is protected."

The administration's trade actions, together with efforts to reduce business regulation and the recent massive tax cut, already are impacting the economy, Mnuchin said.

He said GDP "could surprise on the upside very significantly" this year with growth of three percent or more.

Many economists see economic growth this year of close to that level, but expect it to slow in 2019 and beyond.

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