President Trump on Tuesday got tough on China with tariffs, but a bipartisan group of senators want to get tougher, pushing legislation to crack down on Chinese cellphone giant ZTE.
Mr. Trump has a soft spot for ZTE. Although the high-tech company likely will suffer under the latest tariffs, the president has given the company a reprieve from harsh U.S. sanctions for illegally doing business with Iran and North Korea.
But the president has a bigger fight on his hands than the fate of any individual business in China.
A day after slapping tariffs on $200 billion of Chinese goods, Mr. Trump warned Beijing that its threat of retaliating with tariffs on $60 billion of U.S. goods would trigger bigger duties — enough to essentially tax all of China’s shipments to the U.S.
“If there’s a retaliation against our farmers and our industrial workers, our ranchers, if any of that goes on, we’re going to kick in another $257 billion,” the president said.
Mr. Trump previously said the next round of tariffs would be $267 billion.
America’s $200 billion in tariffs and China’s $60 billion are set to take effect Monday. The U.S. previously hit China with $50 billion in tariffs, and Beijing matched it.
Mr. Trump’s tariffs are intended to force China to stop unfair trade practices, with an emphasis on its theft of intellectual property that cost American business as much as $600 billion a year.
“China has been taking advantage of the United States for a long time, and that’s not happening anymore. We can’t let that happen,” Mr. Trump said. “I have a great relationship with President Xi [Jinping]. He’s a friend of mine. But … I’ve been telling him, we can’t let it happen.”
Mr. Trump was not always so tough on Mr. Xi.
When the trade war with China started heating up in the spring, Mr. Trump gave ZTE a break by loosening crippling U.S. sanctions imposed on the company for doing business illegally with Iran and North Korea.
He did it as a favor to Mr. Xi, whose hometown hosts ZTE headquarters and faced massive job losses if the company remained under U.S. sanctions.
The move alarmed lawmakers, who view ZTE as a bad actor. The Pentagon banned ZTE phones on military bases because of the risk of Chinese spying through the phones.
Republican and Democratic senators now want extra scrutiny of ZTE. A bill introduced Tuesday would require the high-tech company to regularly certify its compliance with U.S. export controls and sanctions laws — or face another ban.
The bill, the ZTE Enforcement Review and Oversight (ZERO) Act, was introduced by Sens. Mark R. Warner, Virginia Democrat; Marco Rubio, Florida Republican; Chris Van Hollen, Maryland Democrat; Susan M. Collins, Maine Republican; Elizabeth Warren, Massachusetts Democrat; and James Lankford, Oklahoma Republican.
“ZTE has a history of violating U.S. sanctions and misleading the U.S. government,” said a statement by Mr. Warner, the top Democrat on Senate Select Committee on Intelligence.
Washington blocked ZTE from buying U.S. parts in April after Washington learned that the company had violated trade bans with Iran and North Korea.
China’s second-largest telecommunications manufacturer, ZTE depends on U.S.-made components for the production of mobile phones and other products.
The ban caused ZTE to halt operations.
As a favor to Mr. Xi, Mr. Trump gave ZTE a way out of the sanctions.
The firm signed an agreement with the Commerce Department that it would comply with relevant U.S. laws, in addition to paying a $400 million security deposit.
The ZERO Act takes issue with ZTE’s forthrightness following U.S. laws, in addition to the Commerce Department’s ability to keep the company in compliance.
“ZTE has violated American sanctions on Iran and North Korea and lied about its efforts to rectify the issue,” Ms. Collins said in a statement. “The company’s disregard for U.S. laws undermines our national security interests and cannot be tolerated.”
Ms. Collins, Mr. Rubio and Mr. Warner have voiced concerns about potential damage from Mr. Trump’s tariffs, including high prices and job losses in the U.S.
Mr. Trump argues that any economic pain from tariffs will be short-lived compared with the long-term benefit of fixing the trade relationship with China.
• Dan Boylan can be reached at dboylan@washingtontimes.com.
• S.A. Miller can be reached at smiller@washingtontimes.com.
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