Senate Democrats Warn Trump Over Any Deal on China's ZTE

Posted May 16, 2018

What Trump did not mention, however, is that two days before his first tweet about ZTE, "a state-owned Chinese construction company called the Metallurgical Corporation of China announced it would float a $500 million loan to Indonesian developers to facilitate the construction of a vast "integrated lifestyle resort" called MNC Lido City that includes Trump-branded hotels, residences, and a golf course", as Vox puts it.

Earlier this month, a US delegation led by Treasury Secretary Steven Mnuchin presented China with a list of demands to tackle allegations of intellectual property theft and other trade policies Washington considers unfair.

China was asked to foreswear its World Trade Organization rights to challenge USA trade protection, a request that commentators in China likened to the "unequal treaties" imposed on China by imperialist powers in the 19th century.

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So, how do we understand what is going on?

It is not well known in the US because it targets the low- to middle-market in China and elsewhere in the developing world. House Speaker Paul Ryan increased the time pressure for negotiators last week by saying he'd need to be notified about a deal by May 17 to give the current Congress an opportunity to approve it. It is an important Chinese company, ostensibly private but with good ties to the Communist Party.

US security concerns about Chinese telecom equipment also were voiced by senior USA intelligence leaders during congressional testimony earlier this year. The U.S. Department of Commerce made the move after the company failed to punish employees who reportedly violated American trade controls against Iran and North Korea. In 2017, ZTE was fined by the Commerce Department for making illegal sales to those two countries.

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He claimed that the government would follow through "even if it had a second left [in the completion of its term]". Separately PTI leader Fawad Chaudhry said the former premier does not respect the state or institutions.

As any Trump Administration cabinet secretary with an instinct for self-preservation would do, Ross came down hard on ZTE, issuing a seven-year import ban that appeared likely to put the firm and its 70,000 employees out of business.

ZTE was also slapped with a suspended seven-year ban on the purchase of USA tech products. The firm consequently stopped operating this month.

Sen. Marco Rubio, R-Fla., who with Sen. The message now from the Trump administration is that legal/regulatory penalties can be negotiated down. "Given the security concerns associated with these devices, as expressed by senior USA intelligence officials, it was not prudent for the department's exchange services to continue selling these products to our personnel".

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ZTE reached a settlement in March 2017 for violating USA export laws and paid penalties totaling $1.19 billion.

China is not willing to consider the maximalist demands, such as committing to reduce the trade imbalance or dropping their "Made in China 2025" industrial policy aimed at developing their high-tech sectors.

Trading partners often complain that China flouts the rules to get ahead.

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"The Chinese have said 'we want to see the specifics.' We gave them all the specifics in terms of trade issues". The Trump-Kim summit is now set for June 12 in Singapore. Campaigning is gathering pace before Mexico elects a new president on July 1, which could make the talks more politically complicated. "Actually, he's probably lost a lot of steps". "It is not a question to me of economics, it is a question of security". If implemented, the tariffs would place USA manufacturers at a competitive disadvantage relative to their worldwide and US competitors that are not covered by the tariffs, according to NEMA.