U.S. Lawmakers Urge Hard Line on China Tech Transfers, ZTE

More than a quarter of U.S. senators have urged President Donald Trump not to soften current restrictions on American technology transfers to China, as two House of Representatives members advised similar toughness against telecom equipment-maker ZTE Corp. for violating U.S. rules.

The chorus of voices comes as Trump’s administration is reportedly nearing a deal that would allow ZTE to avoid crippling U.S. sanctions that could shut down the company. Washington last month had announced it would ban ZTE from buying U.S.-made equipment for seven years as punishment for its past selling American-made equipment to Iran in violation of U.S. rules at the time. 

The chorus of lawmaker appeals also comes against a broader backdrop that has seen Trump’s administration veto a growing number of Chinese plans to buy American and European assets in the sensitive chip and financial sectors.

At least 27 of the 100 U.S. senators, both Democrats and Republicans, urged Trump’s administration on Tuesday not to soften restrictions on the transfer of U.S. technology to China.

“There can be no question that China seeks to surpass the U.S. both economically and militarily and become the world’s foremost superpower, and neither the federal government nor private U.S. companies should aid and abet that effort,” the senators said in a letter, whose signatories included Chuck Schumer, the top Senate Democrat, and John Cornyn, the No. 2 Republican.

In a separate but similar action, two U.S. members of the House of Representatives, including the Republican chairman of a powerful House committee, asked Trump on Tuesday not to lift penalties on ZTE.

In a letter to Trump seen by Reuters, Republican Representative Mike McCaul and Democratic Representative Joaquin Castro urged the president not to lift penalties imposed on ZTE for violating sanctions on Iran and North Korea.

“Lifting these penalties that were instituted after a law enforcement process would undermine the credibility of the United States sanctions,” they wrote, saying ZTE has ties to China's military and intelligence and that giving it access to U.S. components and technology is a security risk.

McCaul is chairman of the House Homeland Security Committee and a member of the House Foreign Affairs Committee. Castro is a member of the Foreign Affairs panel and the House Intelligence Committee.

They also said in the letter that providing a reprieve for ZTE would undermine U.S. efforts to apply pressure on Iran and North Korea, and encourage other organizations to evade U.S. sanctions.

Reuters – Caixin

Contact reporter Yang Ge (geyang@caixin.com)