WASHINGTON (Reuters) - U.S. President Donald Trump on Tuesday floated a plan to fine ZTE Corp (000063.SZ) (0763.HK) and shake up its management as his administration considered rolling back more severe penalties that have crippled the Chinese telecommunications company.
Trump’s proposal ran into immediate resistance in Congress, where Republicans and Democrats accused the president of bending to pressure from Beijing to ease up on a company that has admitted to violating sanctions on Iran.
Their reaction could complicate Trump’s efforts to win concessions from China that would narrow a $335 billion annual trade gap.
Speaking at the White House, Trump said U.S. technology companies have been hurt by an April Commerce Department decision that prohibits them from selling components to China’s second-largest telecommunications equipment maker. ZTE shut down most of its production after the ruling was announced.
“They can pay a big price without necessarily damaging all of these American companies,” Trump said.
Trump said ZTE may instead face a fine of up to $1.3 billion, new management and a new board of directors.
Before Trump spoke, Republicans and Democrats in Congress were already taking action to prevent him from easing pressure on ZTE.
The Senate Banking Committee voted 23-2 to make it harder for the president to modify penalties on Chinese telecommunications firms, and lawmakers said they were examining other possibilities.
“The proposed solution is like a wet noodle,” said Senate Democratic Leader Chuck Schumer, who accused Trump of jeopardizing national security for what he described as minor trade concessions.
According to sources familiar with the