Conference Committee Could Seal Fate of ZTE Export Ban
An amendment that would stop the deal to lift an export ban on Chinese telecom equipment maker ZTE is expected to pass the Senate June 18 as part of the defense authorization bill. Since the House of Representatives did not include such an amendment in its version, passed in May, conference committee members would have to agree to include it in the final version. House Speaker Paul Ryan, who will not serve on the committee, said he doesn't know what position the House negotiators will take. "I'm going to leave it to our conferees," he said at a press conference at the Capitol June 14.
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But House Minority Leader Nancy Pelosi, in response to a question from International Trade Today at her June 14 press conference, said it's baffling that the president intervened in the Commerce Department's enforcement case against ZTE. Initially, the Commerce Department said the company deserved a seven-year export ban because of its lies about complying with earlier penalties for selling technology to North Korea and to Iran in violation of U.S. sanctions. That was essentially a death sentence for the firm, because of its reliance on U.S. semiconductor chips. But after President Donald Trump tweeted in May that he and China's president were working to get ZTE back in business fast, saying, "Too many jobs in China lost," the Bureau of Industry and Security softened the punishment, instead instituting a second $1 billion-plus fine.
"The president is saying we can't act against them because we have to save jobs in China," she said. "Really? ZTE should not be getting this gift." The day before, a White House spokesman defended the ZTE penalty, saying it gives the U.S. government "complete oversight of their future activity without undue harm to American suppliers and their workers."
Senate Minority Leader Chuck Schumer, D-N.Y., called that an attempt to derail the bipartisan agreement to restore the export ban. "Both parties in Congress must be resolute in blocking the president's bad, pro-China ZTE deal," he said. He said the export ban is "vital to America's national and economic security."
Pelosi also linked the ZTE export ban to national security, and said it doesn't make any sense to levy steel and aluminum tariffs based on national security against allies while rescinding the export ban on ZTE. She said she supports the efforts of Sen. Bob Corker, R-Tenn., to give Congress a veto over Section 232 tariffs. His amendment was blocked from the defense bill.
"When it is an excuse, not a reason, I think Congress should have the ability to have leverage in that discussion," she said. "You can't be frivolous about using the national security waiver" on tariffs. "To say you're instituting a tariff because of national security reasons, and at the same time, you're saying to ZTE, 'It's OK if you're a cybersecurity threat, it's OK if you violated the sanctions' -- how can this make sense?"