The Obama and Trump administrations had previously sought to punish ZTE, a huge company that makes phones and other products, for selling items to countries in violation of U.S. sanctions. A number of lawmakers from both parties have also warned that ZTE’s close ties to the Chinese government could make it a cybersecurity threat against the United States.
The company was found to have also lied about selling phones to Iran and North Korea. Trump’s Justice and Commerce departments enacted stiff penalties, which most thought could put the company out of business because it would be blocked from acquiring U.S. parts.
Some senior Chinese officials were enraged and have urged Trump to reverse decisions made by Commerce Secretary Wilbur Ross and others. Trump on Sunday, in a Twitter post that shocked many of his advisers, said he had intervened to help ZTE and protect Chinese jobs.
U.S. officials are now discussing a package of changes that would relax penalties on ZTE in exchange for China easing tariffs on U.S. agricultural products, though talks remain very fluid. Negotiations are continuing this week in Washington as China’s vice premier, Liu He, is visiting with senior White House officials.
Democrats and some Republicans have accused Trump of grasping for any leverage he might be able to find in the trade talks with China.
“America’s national security must not be used as a bargaining chip in trade negotiations,” the Democratic senators wrote. “Offering to trade American sanctions enforcement to promote jobs in China is plainly a bad deal for American workers and for the security of all Americans. Bargaining away law enforcement power over bad actors such as ZTE undermines the historically sharp distinction between sanctions and export control enforcement and routine trade decisions made by the U.S.”
The U.S. government had previously fined ZTE $1.2 billion, and the Commerce Department last month slapped it with a “denial of export privileges,” a move that could have effectively put it out of business because it meant U.S. companies could not sell any products to ZTE.
“ZTE misled the Department of Commerce. Instead of reprimanding ZTE staff and senior management, ZTE rewarded them. This egregious behavior cannot be ignored,” Ross said last month.
Trump is working to force Beijing to allow more U.S. imports into China, and he has threatened to impose tariffs on steel and aluminum if major concessions aren’t made. In their letter on Tuesday, the Senate Democrats told Trump he shouldn’t start out by cutting the Chinese government breaks related to ZTE.
“America’s policies toward China should put American workers, farmers and businesses first, not China’s,” they wrote in the letter.
On Monday, one day after Trump said in a Twitter post that he had instructed Ross to help the company, Ross said he was evaluating ZTE’s penalties but that his decision would not be linked to any trade discussions. Trump seemed to overrule that a few hours later in another Twitter post.
Trump met with Republican senators Tuesday during a closed-door lunch. ZTE was not discussed, several senators said.
Erica Werner contributed to this report.