Both parties unite....

Lawmakers from both parties unite against Trump’s ZTE sanctions rollback

By ADAM BEHSUDI

After President Donald Trump trashed the Trans-Pacific Partnership, threatened to withdraw from NAFTA multiple times and proposed trade-war inducing tariffs against China, Congress may have finally found the red line on trade lawmakers can agree on.

Members of both parties on Tuesday stepped up their battle against a potential move by Trump to ease sanctions on Chinese telecommunications giant ZTE in a bid to strike a broader deal with Beijing on trade.

“This seems to be an area where Democrats and Republicans in the House and the Senate are coming together and telling the president, you’ve got to be tough on China, you have to have your actions match your rhetoric,” Senate Minority Leader Chuck Schumer said at a press conference.

The latest response came from the Senate Banking Committee, which approved an amendment that would bar the president from modifying any civil penalties against “Chinese telecommunications companies“ unless he could certify that the company has not violated U.S. law in the past year and is fully cooperating with an investigation.

At the request of President Xi Jinping of China, Trump is considering loosening a seven-year ban on U.S. companies selling software and components to ZTE. The Commerce Department handed down the penalty after the company was caught violating terms of a March 2017 agreement in which it had agreed to pay $1.19 billion in criminal and civil fines for making sales to Iran and North Korea in violation of U.S. sanctions. ZTE says a seven-year ban will force it to shut down.

“I do not have any idea specifically what has driven the sanctions relief on ZTE, and I think there is a responsibility that comes from the administration to the legislative side to explain why these kind of things are happening,” said Sen. Bob Corker (R-Tenn.), who voted in favor of the measure but cautioned that his support for any final provision could change if it has any unintended foreign policy consequences.

The provision was approved by a panel vote of 23-2 as an amendment to a larger bill that would overhaul the process the U.S. government‘s process for scrutinizing the national security risks of foreign investments under the Committee on Foreign Investment in the United States.

The House Appropriations Committee last week unanimously included in an appropriations bill a provision that would uphold sanctions against the Chinese phone-maker, just days after Trump revealed in a tweet that he had directed his administration to help put the company “back in business.”

A bipartisan group of 27 senators also warned top administration officials in a letter on Tuesday “not to compromise lawful U.S. enforcement actions against serial and pre-meditated violators of U.S. law, such as ZTE.“

“In the case of ZTE, I believe it’s not so much a trade or economic issue than it is a national security issue,” House Majority Whip John Cornyn (R-Texas) said during a press conference.

Trump on Tuesday remained unclear on whether he was using the ZTE issue as a larger chit in negotiations that are aimed at reducing the U.S.-China trade deficit and getting Beijing to reform its intellectual property and technology transfer policies.

He said he was taking a second look at the ZTE penalty “as a favor” to Xi.

“A lot of the stories on trade were incorrectly written, and I'm not saying that's the reporter's fault; I'm saying that I'm not talking about the trade deal,” he said at the White House.

Trump said he’s looking at a “very large fine” of between $1 billion to $1.3 billion against the company and demanding that ZTE put in place new management, a new board of directors, new security rules and requirements that it buy a certain percent of parts and equipment from U.S. companies in lieu of a straight-up ban on doing business with U.S. suppliers.

“By shutting them down, we're hurting a lot of American companies, really good American companies,” Trump said.

Treasury Secretary Steven Mnuchin said Monday there was no "quid pro quo" involved in the Trump administration's review of ZTE, which he described as the sort of favor world leaders occasionally do for one another. Trump initiated the review of the penalties Commerce imposed on ZTE at the request of Xi, just as Trump asks other countries to do favors for American companies, Mnuchin said.

Heading into last week's negotiations between U.S. and Chinese officials, news reports said that China would agree to drop its retaliation on about $3 billion worth of U.S. agricultural exports if the U.S. eased off on sanctions on ZTE.

But the Senate amendment wouldn’t totally foreclose Trump's ability to use ZTE in the context of a broader negotiation. If the measure were to become law, the administration could include relief on ZTE as part of any deal as long as the company was certified to have not broken any laws within a yearlong period and be cooperating with any investigation.

“If the administration wanted to address this issue or reach some kind of agreement, they would simply have to make sure the one-year period had expired,” said Sen. Chris Van Hollen (D-Md.), who introduced the amendment at Tuesday’s mark up.

The final amendment that passed was altered by hand among staff in the ante room of the Senate Banking Committee to garner broader bipartisan support, a Senate Republican aide said.

Part of that compromise included narrowing the measure to apply to a “Chinese telecommunication company“ as opposed to an individual or entity more broadly, the aide said.

“It seems a little inflexible, but I like the spirit of it,“ Corker said. “If there’s a way to improve something before it goes to the floor it’s something I would certainly look at."