Lawmakers take first step in stopping a Trump deal with ZTE

Trump: ZTE exemption is a 'favor' to Chinese leader

"The president and Secretary Mnuchin, what they are doing sends a unsafe signal to businesses around the world that the United States is willing to forgive sanction violations or reduce penalties", Schumer said.

"This was not a quid pro quo or anything else", he added.

The action was related to violation of U.S. sanctions on Iran and North Korea and banned American companies from selling semiconductors and other components to ZTE, causing the Shenzhen-based company to cease most operations. Those infractions, along with concerns that ZTE could use its devices to spy on Americans, led to a seven-year ban on ZTE being allowed to purchase us parts in production, crippling its business.

Ross seemed surprised last week at Trump's demand to reopen a case settled only weeks earlier, and resistant to treat ZTE's fate as a bargaining chip on trade rather than a straightforward enforcement matter.

Now, however, members of the administration have signaled that the terms of ZTE's punishment are up for negotiation. China is now committed to buy more United States agricultural and energy products aimed at reducing the yawning trade deficit between them.

On Tuesday (local time), Mr Trump also floated a plan to fine Chinese telecommunications gear maker ZTE up to $US1.3 billion and shake up its management with a new board of directors. "They have avoided tariffs & got a #ZTE deal without giving up anything meaningful in return by using N. Korea talks & agriculture issues as leverage", he tweeted. "So I disagree with a lot of the specific policy choices, but I at least appreciate the space Trump is opening up for us to remind ourselves how much agency we have".

"As someone who was part of diplomatic talks, this story on how Trump team screwed up China negotiations is a textbook case of almost EVERY SINGLE THING you should NOT do", Goldenberg tweeted Monday.

"I can assure you this president is very focused on protecting American technology", said Mnuchin. "So I'm looking at it", he said.

A similar move on imported U.S. agricultural goods may follow, and China may end up buying more American farm goods in the future, two sources revealed to Reuters . Ben Sasse, R-Neb., told reporters he had met with farmers and ranchers in his office all morning and that none of them believed this latest development would help them.

Tension between the two sides has been growing since the Trump administration proposed tariffs of $US50 billion ($66 billion) on Chinese goods and said it might extend the levies to an additional $US150 billion ($199 billion).

Treasury Secretary Steven Mnuchin said that the United States was not willing to revisit the penalties.

"We can do a 301, where we dont need China, where we can just say, Look, this is what we want. this is what we think is fair". The Pentagon has already banned ZTE products from being sold on American military bases.

Reports, since denied by Trump, that the USA was close to easing penalties against ZTE Corp and allowing the Chinese company to resume buying United States components, was also criticized by lawmakers. The Senate measure, introduced by Sen.

"The reality is we should not be trading away national security for some non-security related issue", Van Hollen said.

Congress last year passed a law that required the administration to impose new sanctions on Russian Federation, though similar action this year could be more hard as the November elections draw near.

But so far the leaders of both chambers have not indicated any sense of urgency to take up bills to curtail the administration's ability to act on trade issues with China or any other country.

In addition to these lawmakers' concerns, the intelligence community has warned that lifting sanctions on ZTE will result in a national security disaster, considering the Chinese company's technology could be used to conduct surveillance on the U.S.

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