Lawmakers in the US have rejected President Donald Trump's plan to ease restrictions on the Chinese telecommunications equipment and systems firm ZTE (opens in new tab)due to the potential security threat it poses.
President Trump responded by defending his decision to revisit penalties on the firm (opens in new tab) for openly disregarding US sanctions on trade with Iran. The administration is considering a possible arrangement that would ease the ban on ZTE in exchange for the elimination of new Chinese tariffs on US farm products such as pork, fruits, nuts and ginseng.
At a Foreign Relations Committee hearing on Asia policy, Republican Senator Marco Rubio spoke out about the potential deal, saying:
“I hope the administration does not move forward on this supposed deal I keep reading about. They are basically conducting an all-out assault to steal what we’ve already developed and use it as the baseline for their development so they can supplant us as the leader in the most important technologies of the 21st century.
In an unusual move over the weekend, President Trump took to Twitter where he pledged to help the company which has suspended its main operations (opens in new tab) due to the fact that the penalties had cost too many jobs in China.
In April, the Commerce Department found that ZTE had violated a 2017 settlement created after it had previously violated sanctions on Iran and North Korea which resulted in US companies being banned from providing exports to the firm for seven years.
US companies are estimated to provide 25 to 30 per cent of the components used in ZTE's smartphones and equipment used to build telecommunications networks.
While ZTE would certainly benefit from the restrictions being eased, the US government could potentially lose face over the deal after it has publicly called out the Chinese firm as a security risk on multiple occasions.
Image Credit: ZTE