WASHINGTON — The Trump administration pushed back Wednesday on a bipartisan measure that would block the president’s plan to save Chinese telecom ZTE, setting up a showdown between the White House and Senate Republicans.
Administration officials announced last week they would lift a crippling ban on U.S. companies doing business with ZTE and instead impose a $1 billion penalty on the firm. President Trump sought the change after a personal request from Chinese President Xi Jinping.
But the decision drew bipartisan criticism on Capitol Hill, where a group of lawmakers tucked language into a pending defense bill to block the lower penalty. ZTE has been repeatedly penalized after it sold U.S.-made technology components to Iran. The Senate is set to vote on the defense bill as soon as this week,
White House officials said Wednesday they are working with the Senate to change the language in the National Defense Authorization Act. White House spokesman Hogan Gidley pointed to “massive penalties” and “historic enforcement action” he said the Chinese telecom will face under the agreement.
“This will ensure ZTE pays for its violations and gives our government complete oversight of their future activity without undue harm to American suppliers and their workers,” Gidley said in a statement.
“The administration will work with Congress to ensure the final NDAA conference report respects the separation of powers,” he added.
Analysts have said the Chinese government will likely pay the fine. The agreement outlined by the Commerce Department also includes a U.S.-appointed compliance team to monitor ZTE’s business practices.
Lawmakers will then reconcile the measure with a House-passed bill that does not include language on ZTE.
White House legislative affairs director Marc Short told CNBC on Wednesday that Trump believes “that China has been instrumental in helping us to get to this point on North Korea.” Trump met with North Korean leader Kim Jong Un in Singapore this week.
But Republicans and Democrats have questioned the relaxed penalty. The Senate language is supported by Sen. Marco Rubio, R-Fla., and Sen. Tom Cotton, R-Ark.
The president has said he views the issue as part of his administration's broader effort to renegotiate trade with China. Trump has imposed tariffs on steel and aluminum that are targeted at Beijing, and has threatened barriers on other Chinese-made products.
Democrats blasted the White House remarks.
“Both parties in Congress must be resolute in blocking the president’s bad, pro-China ZTE deal," Senate Minority Leader Chuck Schumer, D-N.Y., said in a statement.