iStock/Thinkstock(WASHINGTON) — As the Trump administration tries to sell its rapidly-evolving trade deal with China to Congress, members of both parties are not convinced it’s in the best interest of the United States.
Treasury Secretary Steve Mnuchin appeared before a Senate subcommittee Tuesday during which he pledged that any changes to penalties on the Chinese telecom ZTE, which is publicly traded but whose largest shareholder is an enterprise owned by the state, would not affect American national security.
“I can assure you that whatever the Commerce Department decides, the intel community has been part of the briefings and we will ensure that we enforce national security issues,” Mnuchin said.
“This was not a quid pro quo or anything else,” he added.
Last month the United States slapped steep penalties on ZTE for violating U.S. sanctions and doing business with Iran and North Korea. Those infractions, along with concerns that ZTE could use its devices to spy on Americans, led to a seven-year ban on ZTE being allowed to purchase U.S. parts in production, crippling its business. ZTE also agreed to pay a $1.2 billion fine.
Now, however, members of the administration have signaled that the terms of ZTE’s punishment are up for negotiation. President Donald Trump tweeted Monday that China had agreed to buy an unspecified amount of American agricultural exports in exchange for the United States easing its sanctions.
And in remarks at the White House Tuesday, Trump said he envisioned ZTE having to pay another fine, plus installing a new board and management structure, in exchange for sanctions relief.
But he didn’t get into many details, saying, “I don’t like to talk about deals until they’re done. So we’ll see what happens.”
Trump also noted that ZTE buys most of its parts from American companies, meaning those firms get caught in the crossfire and lose business.
“When you do that, you’re really hurting American companies, also. So I’m looking at it,” he said.
But vague assurances that China will buy more farm products aren’t good enough for some lawmakers, especially those from states that depend heavily on agricultural exports. Sen. Ben Sasse, R-Neb., told reporters he had met with farmers and ranchers in his office all morning and that none of them believed this latest development would help them.
“They’re scared to death,” Sasse said, adding that he would “love to see the particulars” of the China proposal that Trump mentioned in his tweet.
Members of the Senate Appropriations Subcommittee on Financial Services, before which Mnuchin testified Tuesday, tried to ask him more about the specifics of the China arrangement, but he deferred to the Commerce Department, led by Secretary Wilbur Ross, who he said had taken the lead on the talks.
But Mnuchin has participated in those discussions, and Sen. Chris Coons, the ranking member on the committee, said he was disappointed Mnuchin didn’t answer questions more directly.
“I think Sec. Mnuchin is well aware of decisions being made by the Trump administration with regard to ZTE. He simply passed the buck over to the Secretary of Commerce who wasn’t in front of us today,” Coons said.
As the administration continues to send mixed signals on the status of the negotiations, lawmakers are wasting no time preparing legislation to potentially check Trump’s authority to lift sanctions on ZTE.
The House of Representatives is voting this week on its annual defense authorization bill which contains a provision which would prevent the military from working with contractors that use ZTE devices and networks. The Pentagon has already banned ZTE products from being sold on American military bases.
House and Senate committees are also working on bills to prohibit the Trump administration from unilaterally lifting the seven-year ban on ZTE’s ability to purchase U.S. supplies. The Senate measure, introduced by Sen. Chris Van Hollen, D-Md., passed the Banking Committee Tuesday by an overwhelming margin.
“The reality is we should not be trading away national security for some non-security related issue,” Van Hollen said.
Congress is also exploring ways to expand the US government’s ability to review foreign transactions through the Committee on Foreign Investment in the United States (CFIUS). The Banking Committee also approved a bill by Sen. John Cornyn, R-Texas., that would do just that.
But so far the leaders of both chambers have not indicated any sense of urgency to take up bills to curtail the administration’s ability to act on trade issues with China or any other country.
House Speaker Paul Ryan said that the administration must take national security and intelligence concerns into account but said Tuesday he was “not a party to the administration’s talks.”
When Cornyn, the sponsor of a bill to strengthen foreign transactions oversight, was asked about other legislative solutions, he responded, “I’m sure we’ll be having that conversation quite publicly and it will manifest itself in a number of ways.”
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