Trump’s pledge to help China’s ZTE spurs backlash in Washington

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WASHINGTON (Reuters) – President Donald Trump’s pledge to help a Chinese telecommunication company that broke U.S. sanctions law sparked a backlash from lawmakers who said the move could weaken the U.S. hand in upcoming trade talks with Beijing.

FILE PHOTO: The logo of ZTE Corp is seen on its building in Beijing, China April 19, 2018. REUTERS/Stringer

Trump said on Sunday that he was working with Chinese President Xi Jinping to help ZTE Corp revive jobs after the company ran afoul of U.S. economic sanctions on Iran by selling telecom equipment made with U.S. components.

His decision angered lawmakers from both parties, who said it looked like he was backing down ahead of high-stakes trade talks this week in Washington between the United States and China.

“One of the few areas where the president and I agreed, and I was vocally supportive, was his approach towards China. But even here he is backing off, and his policy is now designed to achieve one goal: make China great again,” said Senate Democratic Leader Chuck Schumer.

FILE PHOTO: U.S. President Donald Trump speaks about lowering drug prices from the Rose Garden at the White House in Washington, U.S., May 11, 2018. REUTERS/Leah Millis

Republican Senator Marco Rubio cited concerns about Beijing using telecom companies like ZTE (000063.SZ) (0763.HK), China’s second-largest maker of telecommunications equipment, for espionage.

“I hope this isn’t the beginning of backing down to China,” Rubio said on Twitter, saying Chinese competition had “ruined” many U.S. companies.

“We are crazy to allow them to operate in U.S. without tighter restrictions,” Rubio said.

In April, the Commerce Department banned U.S. companies from selling to ZTE for seven years after it illegally shipped U.S. goods to Iran and North Korea. The company shut its main business operations last week.

“Too many jobs in China lost. Commerce Department has been instructed to get it done!” Trump wrote on Twitter. The White House said later that Trump expected Commerce Secretary Wilbur Ross to make an independent decision.

Ross is slated to make public remarks on Monday at an event with journalists at 1 p.m. ET (1700 GMT).

ZTE, whose shares remain suspended, has not commented on Trump’s statement.

Chinese Foreign Ministry spokesman Lu Kang on Monday said China “greatly appreciates the positive U.S. position on the ZTE issue” and that Chinese Vice Premier Liu would visit Washington from Tuesday to Saturday.

Sources briefed on the matter said Beijing had demanded the ZTE issue be resolved as a prerequisite for broader trade negotiations.

Democratic Senator Ron Wyden questioned the timing of Trump’s remark. “Unilateral concessions before an upcoming trade negotiation. This may be the art of the deal for China but it’s a big loser for American workers, companies, and national security,” he said.

Reporting by Valerie Volcovici and Karen Freifield, Steve Holland, David Lawder, Chris Sanders and David Morgan in Washngton; Michael Martina, Sue-Lin Wong and Matthew Miller in Beijing; and John Ruwitch in Shanghai; Editing by Peter Cooney, Philip McClellan and Martin Howell

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