Rowdy Senators snap Trump’s ZTE olive branch

Senators are planning to derail President Trump’s plans to ease pressure on ZTE, potentially removing the ban on US exports, pointing out the law cannot be bent and ignored to satisfy political objectives.

The emergence of this resistance comes in the form of a letter from 26 Senators, representing both sides of the aisle, seemingly in reaction to comments made by Trump. The edge of menace and aggression has been drained out of the government in recent days, as the administration has eased its foot off ZTE’s neck. Trump has suggested a $1.3 billion fine, as well as management change at ZTE would be enough of a punishment, though the Senators disagree.

The letter states:

“We urge you not to compromise lawful US enforcement actions against serial and pre-meditated violators of U.S. law, such as ZTE. This is particularly critical when the violators are state-owned and -influenced, part and parcel of China’s policies and practices designed to strengthen its own national security innovation base, and essential tools of efforts to spread China’s influence in other countries that pose national security threats to the United States. Export control and sanctions laws should not be negotiable, because fidelity to the rule of law is a key part of what distinguishes the US from a country like China that is ruled by a Communist dictatorship.”

It seems the Senators are going to hold Trump accountable to his and his administrations hostility towards China. Fingers have been pointed at the Chinese for breaking the law, and the Senators are reminding the President that he cannot ignore these infringements, bend the rules or forget about enforcement now China seems to be favourable to the idea of buying more US goods.

Those who are in favour of globalisation and borderless trade would have let out a sigh of relief as tensions seemed to calm, but should Senators block any deal Trump puts forward, the potential for a trade-war could well return. This could well turn into a bit of a disaster for the Trump administration.

The purpose of the ZTE denial order could simply have been to demonstrate the might of the US government and the power of US sanctions. It certainly worked, bringing ZTE to its knees, but might well have just been a negotiating tactic to weaken the position of China. Demonstrate how reliant the Chinese economy is on US suppliers and technology, before easing back and finding a more palatable solution for the US government.

Trump might have over-estimated his control over the situation and his ability to reign back in sanctions, as it seems Senators have picked up the scent and are determined to make an example of ZTE. The whole exercise might have been a play out of ‘The Art of the Deal’, but the Senators clearly haven’t read it.

Alongside the letter, the Senate Banking Committee has also approved an amendment to a bill that would give regulators more authority to block foreign investment in the US, effectively blocking Trump’s ability to ease sanctions on ZTE. The bipartisan committee voted 23-2 in favour of the amendment, which was proposed by the Democrat Senator of Maryland, Chris Van Hollen.

“If the president and his team won’t follow through on tough sanctions against ZTE, it’s up to Congress to ensure that it happens,” said Minority Leader Senator Charles Schumer.

For sanctions to be eased on ZTE, the firm will still have to prove to Congress that it is not breaking the law. You have to wonder whether the President actually cares whether ZTE is breaking the law or not; as long as the Chinese trade deficit is brought down, it doesn’t really matter. At least that is what it looks like watching from the UK.

The Trump administration did a fantastic job of shaking the cage and awakening the paranoid patriot inside each of the Senators with stories of spies and bugs in telco equipment, but now the President is struggling to keep a lid on the situation. The problem with democracy is that people don’t have to think the same way as you just because you are in charge. Trump is seemingly finding this out very quickly.