ZTE Deal On Brink Of Collapse After Senate Vows To Derail Trump Agreement

Update: In what looks like a last-minute attempt to save face, the White House is insisting that it does, in fact, want to block an amendment that would derail its deal to save ZTE.

  • Senior White House Official: White House to Try to Block ZTE Language in Senate Defense Bill
  • White House Will Fight to Change ZTE Language Later In Legislative Process -- Senior White House Official
  • House Has Already Passed a Defense Bill That Needs To Be Reconciled With Senate Bill

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Now that President Donald Trump has notched what he views as another foreign policy victory in his historic meeting with North Korean leader Kim Jong Un, Republican lawmakers have noticed something unusual: Trump isn't trying to dissuade lawmakers from supporting a measure that would thwart a White House deal with Chinese telecoms giant ZTE - a deal that many viewed as a sop to secure Chinese President Xi Jinping's blessing for this week's summit with North Korea, according to the Wall Street Journal.

Trump hasn't resorted to using any of his favorite tactics for whipping up votes (for example, using Twitter to bash lawmakers who oppose him), and, in fact, has done little to stop the measure - which the Senate yesterday attached as an amendment to a "must-pass" defense authorization bill - from moving forward.


Trump's lack of enthusiasm for saving ZTE has prompted some lawmakers to speculate that he "doesn't care" about saving the company, which would effectively be forced to shut down if it's cut off from buying US exports.

"I don’t think the president cares about ZTE," Sen. Bob Corker (R., Tenn.) told reporters. "Someone told me that he gave [GOP lawmakers] a wink and a nod and told them he didn’t care. I don’t know if that’s true or not, but I think he did what he did for the Chinese leader but he doesn’t really care what Congress does."

Representatives for the White House, the Commerce Department and ZTE didn’t immediately comment.

ZTE shares plunged 41.5% last night - the company's largest one-day drop in its history - when they opened for trading in Hong Kong after being suspended for two months. The drop wiped out some $8 billion in market value. Shraes of NXP fell 1.4% in premarket trading in the US Wednesday extending a weekly decline on news that the amendment to kill the ZTE deal might go through.


In the weeks leading up to Trump's meeting with Kim, the president spent hours in private meetings trying to convince Republicans to support the White House's decision to give ZTE another chance. But Trump's pleas did little to disabuse lawmakers of their opposition to the deal. In fact, the Senate is expected to pass the defense bill - with the ZTE-killing amendment attached - later this week. And it's looking increasingly likely that the House will adopt a similar measure during the conference committee for the bill.

Sen. Tom Cotton, one of the amendment's main backers, said he believes Trump won't veto the defense bill if it passes with the ZTE measure attached - though he wouldn't say where he got the idea.

On Monday, Mr. Cotton predicted that Mr. Trump wouldn’t use his veto power to reject the defense bill over the ZTE language. Mr. Cotton, who speaks regularly to Mr. Trump, declined to say whether the president had given him a personal guarantee. "I don’t reveal my private conversations with the president," Mr. Cotton said.

In a Tuesday interview, Mr. Van Hollen said: "If the president’s backing down, that’s a good thing for the country." He added: "We would welcome a statement from the president saying he made a mistake and that he now supports the bipartisan amendment on this."

The Commerce Department announced in April that it would prohibit US companies from selling parts to ZTE, a move that effectively doomed the company. Roughly a month later, Trump tweeted that he and Chinese President Xi Jinping were searching for an alternative way to deal with the ZTE problem as Trump declared "too many jobs in China lost!"

While that tweet incensed many lawmakers and officials involved in the defense and intelligence sectors (many have long suspected ZTE and other Chinese telecoms firms of aiding Chinese intelligence gathering efforts), it suggested that ZTE would be a key component of the grand "deal" that Trump is seeking to forge with China (though Wilbur Ross has insisted that the administration's decision to spare ZTE wasn't part of a broader quid pro quo).

Instead of banning ZTE from buying US goods, the company will pay a $1 billion fine, and place an additional $400 million in escrow to be paid out if the company again violates its settlement with the US government. In addition, the company has promised to replace its senior leadership and its entire board, while also funding a compliance operation that will continue for the next decade.


Looney NugginFuts Wed, 06/13/2018 - 10:04 Permalink


... Someone told me that he gave [GOP lawmakers] a wink and a nod and told them he didn’t care.

Trump’s Flip-Flopping is not a negotiation strategy, it is his character trait. I wish I knew that before voting for the cocksucker. Oh well…   ;-)


In reply to by NugginFuts

CheapBastard Looney Wed, 06/13/2018 - 10:08 Permalink

I was shocked to see an article in their gubmint backed newspaper claiming China don't need USA tech anymore so screw Uncle Sam.

Evidently, they have pulled that article off the internet now that some higher level realizes they are 100% dependent on certain items like USA chips and some of the BIG internet servers which are located in the USA.

Some of these ZTE execs got too arrogant evidently. They lied and should be fired. They made China look bad, like liars.

Perhaps let this company go belly up to set an example of the co-dependence of our nations. China ships us junk and we ship them tech.

In reply to by Looney

resistedliving Wed, 06/13/2018 - 10:05 Permalink

nor should he care about that technology ripping off, slave labor, deal reneging POS chinese military owned spy phone mfg.

Problem is not caring when Xi himself raises the issue and now raising China tariffs BEFORE A DONE NORK deal will show USSofA getting played by China yet again

PitBullsRule Wed, 06/13/2018 - 10:12 Permalink

Yeah Politicians are good at screwing up technology companies. In fact, a real politician can screw up just about anything!
These guys are going to be successful at raising the price of cell phones. Thats really good for our American cell phone factories! All those factories we have that are mass producing computers and cell phones, those guys are celebrating today.

For you slow readers, I'm being sarcastic. I actually worked at a company that tried and failed to make a cell phone company in USA. That was about 25 years ago. After they shut that place down, almost nobody tried it again. All the cell phone factories have been in other countries since then. Shutting down ZTE, is like shutting down the last factory, it doesn't help anybody to shut down the last factory. But you'll get to experience that, years from now, when you have to buy a phone, and it costs you more...

Wild Bill Steamcock PitBullsRule Wed, 06/13/2018 - 11:09 Permalink

Just because they can offer cheap cell phones, does it mean that they should be able to operate with impunity? ZTE made one deal already, and seemingly in typical Chinese business style, tried weasel their way out of it.  Why should they have another opportunity? They mean it this time? Please. Consequences should be for all, even giant tech companies offering up cheap consumer garbage

Will there be fallout that could harm the US, sure.  But, it's no excuse for one to be a "too big to fail" apologist

In reply to by PitBullsRule

107cicero Wed, 06/13/2018 - 10:14 Permalink

Crossing the Chinese is not a good policy.

Pushing Russia into the arms of China was stupid enough.  To piss the Chinks off there will be Hell to Pay thuogh in the Chink way it may be  years for the revenge to manifest.

Fentonbr Wed, 06/13/2018 - 10:59 Permalink

Democratic war mongers still attempt to drive a wedge on any attempt by Trump

to turn the deep state war monger party away from another war. They want

to piss off China and others to start another war!

CatInTheHat Wed, 06/13/2018 - 12:04 Permalink

They don't really believe China is working to spy on us. Really? What, through my ZTE phone? I have more to worry about with NSA Google, FB spying on me than CHINA. ZTE got into trouble for selling to IRAN.. and we all know how much Trump and Congress love Israhell. China BRI includes IRAN too, so it must be punished!

Tariffs = Americans pay more. We are punishing China for sending our maufacturing to them on behalf of neoliberal policies of austerity, offshoring of jobs and WAR, where the only ones benefitting are multinational corps and defense contractors? 

When you focus on what the intent of the NEOliberal pro Israhell antirevisionist policies (containment of Russia and China via multipolar world versus America first hegemon) really is, their policy motives are easy to see and have ZERO to do with protecting American Consumer based, not production based, Americans. 

franklin23 Wed, 06/13/2018 - 18:34 Permalink

Congress doesn't have a clue about negotiation. Now that China hasn't responded with tariff reductions Trump can let ZTE go and apply tariffs as well. Then we can hear them scream again about tariffs. Remember Trumps offer to G6- no tariffs no subsidies. Do you think anyone in Congress would think to call G6 bluff? No but they want to control everything. 15% approval doesn't claim much allegiance and donors only get 1 vote too.