Trump suspected that Chinese President Xi Jinping may have had something to do with Kim’s turnabout, musing this week about their meeting this month.
“When Kim Jong Un had the meeting with President Xi, in China, the second meeting . . . I think there was a little change in attitude from Kim Jong Un,” Trump said Tuesday, with Moon at his side. “I don’t like that. I don’t like it from the standpoint of China. Now, I hope that’s not true, because I have a great relationship with President Xi. He’s a friend of mine. He likes me. I like him.”
That’s a perfectly reasonable suspicion. The U.S. and China have been arm-wrestling in trade talks. Xi wanted to force concessions from Trump so he probably encouraged Kim to make some noise about backing out of the summit, expecting that Trump would come running to China for help. “Sure, we’ll help,” Xi would tell him, “but what are you going to do for us? Are you going to cancel that silly export ban that’s threatening to bankrupt ZTE, one of our top telecom companies?” Yessir, Trump would supposedly respond, and suddenly Kim would be friendly again.
It didn’t work out that way. Trump backed out of the summit first and he was justifiably annoyed with Xi for the suspected shenanigans with North Korea that led to the cancellation of his big diplomatic play. But in that case … what’s he doing here, suddenly agreeing to save ZTE anyway? ZTE’s problems with the U.S. government began, remember, when they defied American sanctions on — ta da — North Korea. Now POTUS is rescuing them from Commerce Department penalties just as relations with the NorKs have turned frosty again:
Under the agreement brokered by the Commerce Department, ZTE would pay a substantial fine, hire American compliance officers to be placed at the firm and make changes to its current management team…
The move would allow ZTE to once again begin doing business with American companies, including Qualcomm, the chipmaker based in San Diego that is a primary ZTE supplier. The Chinese company was recently banned from buying American technology components for seven years as punishment for violating United States sanctions against Iran and North Korea, a penalty that industry analysts say threatened to put the company out of business within weeks.
The original penalty imposed by Commerce for ZTE’s sanctions-busting was a huge fine and a solemn promise by the company to discipline executives who’d orchestrated the business with North Korea and Iran. ZTE agreed to it, then ignored the part about disciplining anyone. We’re basically back to the original penalty in this new deal, albeit with compliance officers placed at the company this time to make sure there’s no more funny business. It’s basically a wrist slap for ignoring Commerce’s original penalties.
Congress doesn’t like that this is being treated as a trade negotiation rather than as a law-enforcement issue, with China essentially buying its way out of flouting U.S. sanctions. And they really don’t like that ZTE, which they’ve accused of facilitating Chinese government surveillance of the company’s customers, is getting a pass despite its threat to national security. That’s how you end up with the strange spectacle of hawkish establishmentarian Marco Rubio taking a sterner stance on this than anti-China nationalist Donald Trump:
Yes they have a deal in mind. It is a great deal… for #ZTE & China. #China crushes U.S. companies with no mercy & they use these telecomm companies to spy & steal from us. Many hoped this time would be different. Now congress will need to act. https://t.co/ETMUCe9ia6
— Marco Rubio (@marcorubio) May 25, 2018
Leaders from both parties in the Senate agreed with him. Congress must act. “Simply a fine and changing board members would not protect America’s economic or national security, and would be a huge victory for President Xi [Jinping], and a dramatic retreat by President Trump. Both parties in Congress should come together to stop this deal in its tracks,” said Chuck Schumer in response to today’s news. A few days ago the Banking Committee overwhelmingly passed an amendment to the defense bill that would block Commerce from lifting penalties on ZTE — unless, that is, Trump certifies that the company is in compliance with U.S. law. It’s unclear to me if today’s deal means Trump can now make that certification (i.e. ZTE is complying with the terms of the *new* deal with Commerce) or if it’s the terms of the original Commerce penalties that apply.
Democrats will vote to block Trump’s ZTE deal, but what do Senate Republicans do if Trump comes to them and warns that blowing up ZTE will not only ignite a trade war with China but might lead Xi to get Kim Jong Un to bail on the summit permanently, instigating a new round of nuclear brinksmanship? We can’t risk all of that over the fate of one foreign company, POTUS will tell them. To which Rubio (and Schumer) will say that paying the danegeld this time on ZTE means having to pay it again and again in the future whenever China or one of its major companies is caught cheating on U.S. law. If you’re not going to stand up to China now, when?