WASHINGTON—U.S. President Donald Trump floated a plan to fine Chinese telecoms firm ZTE and shake up its management on May 22, as his administration considered rolling back more severe penalties that have crippled the firm.
Trump’s proposal to ease penalties on ZTE ran into 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.
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, though it was not clear whether he had the legal authority to impose new financial penalties.
That drew a quick response from Republicans and Democrats in Congress.
Some 26 senators, including the chamber’s top Democrat, Chuck Schumer, and No. 2 Republican, John Cornyn, urged the administration in a letter to keep penalties in place for “serial and pre-meditated violators of U.S. law, such as ZTE.”
The Senate Banking Committee also voted 23-2 to make it harder for the president to modify penalties on Chinese telecommunications firms.
