Chinese telecommunications company ZTE “will be shut down” in the U.S. if it does anything to violate the terms of a new deal with the government, White House trade adviser Peter Navarro warned Sunday.
“It’s going to be three strikes you’re out on ZTE,” Navarro told Fox News. “If they do one more additional thing, they will be shut down.”
ZTE agreed Friday to pay a $1 billion fine and overhaul its management team in exchange for Washington’s lifting of a ban that had prevented the firm from buying parts from U.S. suppliers. The ban had crippled the Shenzhen-based telecom giant, which is the fourth-largest seller of mobile phones in the U.S., and it buys much of its component parts from American firms. (RELATED: US Reaches Deal With Troublesome Chinese Telecom Company ZTE)
ZTE’s troubles with the U.S. government go back to March 2017 when the Department of Commerce hit the firm with heavy fines for selling products equipped with American components to Iran and North Korea in violation of U.S. sanctions. The Commerce Department dealt ZTE another blow in April, imposing a seven-year U.S. sales ban after evidence came to light that the company had failed to comply with its agreement with Washington.
The sanctions on ZTE had factored prominently into trade talks between China and the U.S. in recent weeks. Beijing repeatedly requested the company be given a reprieve as part of any broader trade deal, and Trump himself floated the idea of rescinding the sales ban if China eliminated tariffs on American agricultural products.
Friday’s deal drew criticism from both sides of the the political aisle, with lawmakers accusing Trump of acquiescing to a major violator of U.S. sanctions. A bipartisan group of lawmakers introduced legislation to try to overturn the deal, saying ZTE posed a threat to U.S. national security.
Navarro conceded that ZTE was a “bad actor,” but said the Trump administration’s consensus policy was to keep the company on a tight leash. He also argued that Trump allowed ZTE to continue operating in the U.S. in order to secure China’s cooperation on other issues.
“The President did this as a personal favor to the president of China as a way of showing some good will for bigger efforts such as the one here in Singapore,” Navarro told Fox News on Sunday, referring to the impending summit between Trump and North Korean leader Kim Jong Un.
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