Secretary of State Mike Pompeo acknowledged security concerns on Thursday that have been leveled at a Chinese telcom firm that President Trump offered to help as a favor to Xi Jinping.
The company, ZTE, is facing stiff punishment for violating sanctions against Iran and North Korea that would cripple the U.S. branch of the business. Trump directed his Commerce Department secretary to look into the situation and consider a lesser penalty as a concession to China as he zeroed in on a possible trade deal.
His order drew howls from politicians on the left and the right who argued that not only is ZTE a lawbreaker, the company that produces smart phones is a national security threat because it could be a vehicle for Chinese spying.
Pompeo told senators of the Foreign Relations Committee as the topic came up, ‘We’re gonna get this right. We’re gonna reduce the risk from ZTE to America.’
Secretary of State Mike Pompeo acknowledged security concerns on Thursday that have been leveled at a Chinese telcom firm that President Trump offered to help as a favor to Xi Jinping
The Trump administration official came down hard on ZTE, telling a senator,’ I agree,’ that the company is a danger.
‘You should note nothing was done, in what now amounts to almost six years,’ he said of reports that ZTE was a threat that date back to 2012.
But he pledged, ‘This administration’s gonna do something. We’re still working on the appropriate response and how to address it.’
‘We need to makes sure that America is secure and from threats to all their multiple — ZTE is one amongst many of these same types of threat. And I look forward to working — this seems to be a bipartisan issue.’
Asked if the administration still believes that ZTE ought to be banned in the U.S. Pompeo said it would ‘reduce the risk from ZTE to America’ and that its status is ‘still under review.’
‘I’ve been part of some of the discussions, although not all of them. But I understand at least as of yesterday afternoon, no final resolution had been reached.’
President Donald Trump earlier in the morning has changed direction on trade talks with China.
He had hours before expressed unhappiness with the pace of his administration’s progress and as his fellow Republicans criticized him for ‘not winning’ the trade war and going to easy on the Chinese government.
Trump described a prospective trade deal as ‘moving along nicely’ in an early morning Twitter post, but he noted ‘a different structure’ will be needed to get it into place.
He offered no details on what that structure would look like.
Trump was clear on Tuesday that he’s not happy with the progress being made with Beijing, a criticism that came two days after Treasury Secretary Steve Mnuchin said the U.S. and China had agreed to a ‘framework’ for a deal and that the trade war was ‘on hold.’
President Trump described the trade deal with as ‘moving along nicely’ in an early morning Twitter post, but he noted ‘a different structure’ will be needed to get it into place.
President Trump was clear on Tuesday in an Oval Office meeting with South Korean President Moon Jae-in that he was not happy with progress being made on talks with China.
‘No, not really. I think that they’re a start, but we need something,’ he said when reporters asked him if he was pleased with the most recent round of talks between Washington and Beijing.
‘We’ll see what happens, but that deal I will say could be much different from the deal that finally emerges and it may be a much better deal for the United States,’ Trump said Tuesday during an Oval Office meeting with South Korean President Moon Jae-in.
‘I’m not satisfied, but we have a long way to go,’ he noted.
Mnuchin comments sparked criticism that the Trump administration was easing up on China without getting anything in return.
Even members of the president’s own party accused the deal-making president of ‘not winning’ on the issue.
‘Sadly #China is out-negotiating the administration & winning the trade talks right now. They have avoided tariffs & got a #ZTE deal without giving up anything meaningful in return by using N.Korea talks & agriculture issues as leverage. This is #NotWinning,’ Republican Sen. Marco Rubio tweeted Tuesday.
Sen. Ben Sasse, a Republican from Nebraska, told The Hill newspaper farmers and ranchers he met with on Tuesday were not reassured by Trump’s tweet over the weekend that ‘China has agreed to buy massive amounts of additional farm/agricultural products.’
‘I’ve been meeting with farmers and ranchers all morning. I have not yet heard one who thinks the U.S. has won anything from the Chinese leadership,’ he said. ‘They’re scared to death.’
He added: ‘All that I have seen would suggest that China’s winning.’
Sasse has been one of the president’s toughest critics in the Republican Party. Rubio and Trump sparred frequently during the 2016 GOP primary process, with Trump calling the senator ‘Little Marco.’
Trump has denied reports there was deal with Chinese telecommunications giant ZTE, which is facing stiff penalties for violating sanctions against North Korea and Iran.
Chinese President Xi Jinping is also a looming presence over the June 12 summit with North Korea in Singapore.
Sen. Marco Rubio, who sparred with Trump in the 2016 GOP presidential party, tweeted China was ‘out-negotiating’ the administration, who was ‘not winning’ on the trade talks.
He floated a plan Tuesday to fine ZTE Corp. as much as $1.3 billion and shake up its management, as U.S. lawmakers vowed to keep sanctions that crippled the firm.
Trump also demanded the firm guarantee it would purchase a minimum fixed percentage of its device components from American companies.
Reports outlined a proposed trade deal with China being negotiated by the White House, which would lift a seven-year ban that prevents U.S. chipmakers and other companies from selling components to ZTE. The company is China’s second-largest maker of smartphones and telecommunications networking gear.
In return, China would eliminate tariffs on U.S. agriculture or agree to buy more farm products from the United States.
But at present ‘there is no deal,’ Trump said Tuesday. ‘We will see what happens. We are discussing deals. We’re discussing various deals.’
Republicans and Democrats in Congress accused the president of bending to pressure from Beijing to ease up on a company that has admitted to violating sanctions on Iran. Their reaction could complicate U.S. efforts to win trade concessions from China to narrow a $335 billion annual trade gap.
The U.S. Commerce Department imposed the ban on ZTE in April after it determined the company had broken an agreement after it pleaded guilty to shipping U.S. goods and technology to Iran.
The ban has threatened ZTE’s viability by cutting off access to companies that supply 25 percent to 30 percent of its components. Suppliers include some of the biggest U.S. tech companies, including Alphabet Inc’s Google, which licenses its Android operating system to ZTE, and chipmaker Qualcomm Inc.
Also looming over the trade talks with China are the preparations for the June 12 summit with North Korea.
China is North Korea’s largest trading partner with about 90 percent of North Korea’s trade taking place with the Chinese. An economic chokehold from the Chinese is a key component in getting Kim’s cooperation in any deal with the Americans.
A carrots-and-sticks approach from Chinese President Xi Jinping, who has met with North Korean President Kim Jong-Un twice in the past months, could make or break a American deal on denuclearization.
Trump and Kim are scheduled to meet in Singapore on June 12, which would be the first ever face-to-face meeting between a sitting U.S. president and a North Korean president.
Even though Xi won’t have a seat at the table China’s influence in Asia means his shadow will loom over the talks.
Trump was clear on Tuesday that the situation with North Korea is on his mind as he deals with China on trade issues.
‘We have a very powerful hand on trade. And when I’m thinking about trade — you know, I read you folks and you say, ‘Well, why does he’ — there’s a much bigger picture that I have in mind,’ Trump said. ‘When I think of trade with China, I’m also thinking about what they’re doing to help us with peace with North Korea. That’s a very important element.’
But he also insisted he has a ‘great relationship with President Xi,’ and recalled ‘two of the great days of my life’ spent in Beijing last November.