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| Trump and his Indonesian partners |
The Trump administration has told lawmakers it reached a deal that would keep the Chinese telecom firm ZTE alive, a person familiar with the matter said, a move that could clear the way for continued trade negotiations with China but at the risk of provoking a backlash in Congress.
Under the agreement brokered by the Commerce Department, ZTE would pay a substantial fine, hire American compliance officers to be placed at the firm and make changes to its current management team.
In return, the Commerce Department would lift a so-called denial order that is currently preventing the company from buying American products, the person said. The Commerce Department did not respond to requests for comment.
The move would allow ZTE to once again begin doing business with American companies, including Qualcomm, the chipmaker based in San Diego that is a primary ZTE supplier. The Chinese company was recently banned from buying American technology components for seven years as punishment for violating United States sanctions against Iran and North Korea, a penalty that industry analysts say threatened to put the company out of business within weeks.
The collapse of ZTE would be an embarrassing outcome for China and the company’s fate has become a hurdle in trade negotiations between the two countries. President Trump directed the Commerce Department to re-examine ZTE’s penalty based on a personal request from Chinese president Xi Jinping, triggering a fierce pushback from some of Mr. Trump’s national security advisers, as well as lawmakers from both parties.
Mr. Trump, however, has appeared unmoved by those concerns and has been pushing to reach some type of trade resolution with China, which has so far proved elusive. The administration wants to cut a deal on ZTE in exchange for trade concessions from China, including purchases of American agriculture and energy products, people familiar with the discussions said.