Senators demand answers on Trump’s ZTE deal

A bipartisan group of Senators Tuesday demanded answers from Treasury Secretary Steven Mnuchin on the Trump administration’s moves to rescue Chinese telecoms firm ZTE.

“Given the clear findings ZTE is guilty of violating U.S. sanctions against Iran and North Korea, why is the administration backpedaling to make it easier for a Chinese company to operate and compete with U.S. companies?” Sen. Christopher Coons (D-Del.) demanded of Mnuchin in an appropriations subcommittee hearing.

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ZTE was thrust into the political spotlight earlier this month when President Trump tweeted support for helping the Chinese firm continue to operate following steep sanctions imposed on the company by the U.S. Commerce Department.

The Commerce Department had imposed the sanctions and banned the company from buying U.S. components after the company admitted to breaking U.S. sanctions by selling equipment to North Korea and Iran. The agency also cited security concerns that the firm could help China to infiltrate U.S. networks.

“If the U.S. were ever to go to war with China, which I hope never ever occurs and never even comes into the realm of talking about this, it’s not far-fetched to think that China could disable American cellphones or take control of American networks,” Sen. Joe Manchin (D-W.Va) warned at Tuesday’s hearing.

Mnuchin attempted to assure the committee that the administration was taking security matters into account in its approach to ZTE.

“I can assure you that whatever the Commerce Department decides, the intelligence community has been part of the briefings and we will make sure that we enforce national security issues,” he said, before clarifying that the administration was not out to put ZTE out of business.

“The objective was not to put ZTE out of business, the objective was to make sure they abide by our sanctions programs,” he said.

The Wall Street Journal reported on Tuesday that the Trump administration and China had reached an outline for how to save the company from collapsing under the weight of the sanctions.

Sen. Marco Rubio (R-Fla.) responded to the report in a tweet, saying that China was running circles around the administration in trade negotiations. 

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 https://t.co/5kGO3qRGfY

— Marco Rubio (@marcorubio) May 22, 2018

Senate Minority Leader Charles Schumer (D-N.Y.) said that a half-hour conversation with Trump on the matter on Friday had left him worried.

“When President Trump shows weakness and backs off on the area where he’s been the toughest with China, it signals to them they can roll over us on issue after issue where they have been rapacious in terms of how they deal with our economy, our intellectual property, the ability of great American companies not to sell things to China,” he said Tuesday from the Senate floor.

Sen. Jerry Moran (R-Kan.) emphasized the concern over national security risks while probing Mnuchin. 

“I was going to ask you to justify what appears to be a clear and present intelligence issue being resolved with, at least based on the what The Wall Street Journal reports, as changes in our policies regarding those sanctions,” he said.

Mnuchin seemed somewhat taken aback by the intense interest in the matter. 

“There seems to be more interest in this issue than any enforcement issue I’ve seen in recent times,” he noted.