The Wall Street Journal reports:
“President Donald Trump said he was working with Chinese President Xi Jinping to keep ZTE Corp. in business, throwing an extraordinary lifeline to the stricken Chinese telecommunication giant that has been laid low by U.S. moves to cut off its suppliers.
“The surprise intervention comes less than a month after ZTE was hit with an order banning U.S. companies from selling components to the Chinese firm. The U.S. Commerce Department directed companies to stop exporting to ZTE in mid-April, saying the Chinese firm violated the terms of a settlement resolving evasion of U.S. sanctions against Iran and North Korea.“
One can only imagine the tirade Trump would have unleashed if another president had announced that he would bail out a Chinese firm that violated sanctions against two rogue states – one (Iran) against which the United States just reinstated sanctions (and is pleading for the European Union to do the same) and the other (North Korea) with whom we are heading into critical negotiations. Moreover, the Journal notes, “U.S. concerns about ZTE go beyond its evasion of sanctions. For years, the U.S. has accused equipment made by Shenzhen-based ZTE and its larger crosstown rival Huawei Technologies Co. of being a national security threat, an accusation that both companies have denied. The U.S. has largely blocked both companies from selling telecommunications gear in the U.S.”
The Washington Post reports that relief for ZTE might be part of a grand bargain with China, but if so, it is a substantial concession (without yet receiving something equally substantial in return) that on its face contradicts Trump’s rhetoric on job losses to China and undercuts our stated goals in maintaining strict sanctions against rogue states (already damaged by a premature pullout from the Iran deal). You almost wonder what Trump family business might benefit, or what bit of flattery Xi used to extract this favor. Why give in to China on ZTE, of all things, especially now? One senior Senate aide told us, “Workers in Dearborn, Michigan, and Toledo, Ohio, are undoubtedly thrilled that the president has finally followed through on his campaign promise to put jobs in China first.”
Then again, it’s always possible that for the zillionth time the president botched the message. In a written statement, released after the president’s tweet, White House spokeswoman Lindsay Walters offered this: “The President’s tweet underscores the importance of a free, fair, balanced, and mutually beneficial economic, trade and investment relationship between the United States and China. The administration is in contact with China on this issue, among others in the bilateral relationship. President Trump expects [Commerce] Secretary [Wilbur] Ross to exercise his independent judgment, consistent with applicable laws and regulations, to resolve the regulatory action involving ZTE based on its facts.”
In other words, maybe the president didn’t really mean to offer relief from sanctions in exchange for some modest gains. Who knows? Whatever the outcome, one is again struck by Trump’s jaw-dropping lack of discipline and precision. (The thought of Trump throwing out one idea after another in a one-on-one meeting with North Korean leader Kim Jong Un, only to be later corrected, fills many Americans with dread.)
The clarification, if that is what it was, followed a fierce blowback to Trump’s original comment. The move angered and perplexed Trump critics who favored a tougher line on China, including Senate Minority Leader Charles E. Schumer, D-N.Y., who mocked the move on Twitter: “How about helping some American companies first?” (On Monday morning, he added in a written statement, “The toughest thing we could do, the thing that will move China the most, is taking tough action against actors like ZTE. But before it’s even implemented, the president backs off. This leads to the greatest worry, which is that the president will back off on what China fears most – a crackdown on intellectual property theft – in exchange for buying some goods in the short run. That’s a bad deal if there ever was one.”)
The ranking Democrat on the House Intelligence Committee, Adam B. Schiff, Calif., tweeted: “Our intelligence agencies have warned that ZTE technology and phones pose a major cyber security threat. You should care more about our national security than Chinese jobs.”
And Matthew Miller, Justice Department spokesman under President Barack Obama, tweeted, “The message of Trump’s ZTE tweet at the same time he is re-imposing Iran sanctions is that US companies who violate sanctions with Iran will be punished. Chinese companies who do will be let off the hook. America first!”
Republicans were all for coming down hard on ZTE when a Democrat was in the White House (“Secretary of State Mike Pompeo and Interior Secretary Ryan Zinke, who represented districts in Kansas and Montana, respectively, had asked senior Obama administration officials in a 2016 letter to reconsider their decision at the time to relieve ZTE of sanctions for selling technological goods to Iran.”) Likewise, Sens. Tom Cotton, R-Ark., (a Trump cheerleader), John Cornyn, R-Texas, and Marco Rubio, R-Fla., previously sponsored legislation “that would ban the U.S. government from using ZTE’s products and would restrict the government from doing business with companies that use ZTE.”
Early Monday, Rubio tweeted that the “problem with ZTE isn’t jobs & trade, it’s national security & espionage. Any telecomm firm in China can be forced to act as tool of Chinese espionage without any court order or any other review process. We are crazy to allow them to operate in U.S. without tighter restrictions.” Maybe someone needs to offer Trump a refresher on our issues with China.
Indeed, Trump’s initial statement was so contrary to Trump’s own sentiments that one really does wonder whether he fully comprehends what he’s doing. Less than a week after announcing he was reimposing sanctions on Iran, he has offered a get-out-of-jail-free card to an Iran sanctions scofflaw, thereby turning an enforcement matter against ZTE into a political football. (“It’s highly unusual for a president to personally intervene in a regulatory matter, which could undercut the leverage of Treasury and Commerce officials seeking to enforce sanctions and trade rules. It could send the signal to foreign leaders that anything can be put on the bargaining table as Trump seeks to cut trade deals, trade analysts said.”)
“I can’t think of a worse signal right out of the gate about our seriousness on enforcing Iran sanctions,” says former U.S. ambassador to Israel Daniel Shapiro. “The Chinese will laugh at us, but if he thinks the Indians, Koreans, Europeans and others won’t take notice, and act accordingly, he’s nuts.”
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