Trump Administration Reaches Deal to Keep ZTE in Business, Sources Say

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The US Commerce Department communicated the terms of the deal to Congress on Friday, Reuters reported, citing an unnamed congressional aide.

However, the House and Senate have been advancing legislation that would tie the hands of the president in dealmaking with ZTE, which is under a crippling US ban because it did business with Iran and North Korea in violation of sanctions.

Headquartered in Shenzhen, China, ZTE was handed a seven-year ban on buying USA technology components in mid-April.

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Trump told Fox News on Thursday that he personally negotiated the $1.3 billion fine with Chinese President Xi Jinping in a phone call.

If ZTE agrees to the deal, the Commerce Department would roll back restrictions it imposed in April that prohibited US companies from selling parts to the Chinese firm. Finally, ZTE must move its management team around. Marco Rubio, R-Fla., said on Twitter Friday that the president's proposed compromise benefits China at the expense of USA companies.

While such an agreement is viewed as a way to advance trade negotiations with China, lawmakers could be resistant to a deal. Sen. But news of the agreement drew immediate fire on Capitol Hill.

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"ZTE presents a national security threat to the United States - and nothing in this reported deal addresses that fundamental fact", said Maryland Democratic Senator Chris Van Hollen, the author of the Senate provision.

The Senate on Thursday released a defense policy bill containing a provision requiring Trump, before making any ZTE deal, to certify with Congress that ZTE hasn't violated USA law for the past year and is cooperating with US investigations. USA companies provide an estimated 25 percent to 30 percent of components in ZTE's equipment. Earlier in May, the Pentagon ordered bases to stop selling phones made by ZTE and Huawei, another Chinese company. "Simply a fine and changing board members would not protect America's economic or national security, and would be a huge victory for President Xi, and a dramatic retreat by President Trump". The U.S. and China are engaged in high-stakes talks on steel trade and intellectual property rights under the looming threat of punitive tariffs.

Schumer added: "Both parties in Congress should come together to stop this deal in its tracks". The Trump administration has pushed China to help cut the $376 billion trade surplus with the U.S, with Beijing so far making only vague commitments to buy more USA goods, including farm products and energy.

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ZTE needs US components for its mobile phones and network equipment. On Thursday, the House passed a bill - which will now need to pass through the Senate - that would ban United States government employees from using ZTE products and stop the Defence Department from dealing with the company's vendors. John Cornyn (R-Tex.), wrote to top White House officials this week.

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