5/22/2018 — 

WASHINGTON, DC – In an effort to protect national security and send a strong, bipartisan rebuke of the Trump Administration’s reported framework to lift restrictions on Chinese telecommunications company ZTE, the Senate Banking Committee today voted 23-2 to limit President Trump’s ability to remove the sanctions without first certifying to Congress that the company is complying with U.S. law.

U.S. Senator Jack Reed (D-RI), a senior member of the Banking Committee, voted in favor of the measure and says President Trump should put America’s national security and American jobs first.  Senator Reed also said that President Trump should enforce American laws and hold China accountable.

“There is serious, bipartisan concern about President Trump going soft on ZTE and putting American interests at risk.  Today, the Banking Committee sent a strong signal to the President that if he won’t take steps to protect American national and economic security then we will,” said Senator Reed.

U.S. intelligence, trade regulators, and the Pentagon have all warned that ZTE, China’s second-largest manufacturer of telecommunications equipment, poses a significant cyber security risk for the United States and that their devices may be used as a vehicle by the Chinese government to conduct espionage.  Earlier this month, the Department of Defense halted the sale of all smartphones, routers, modems, and other hardware that contain any equipment manufactured by ZTE. And the Trump Administration’s own Treasury and Commerce departments found that ZTE illicitly sold sensitive hardware incorporating American technology to Iran and North Korea and tried to mislead American investigators in clear violation of U.S. sanctions against those countries. 

However, that did not stop President Trump from personally seeking relief for ZTE.  On May 13, President Trump tweeted: “President Xi of China, and I, are working together to give massive Chinese phone company, ZTE, a way to get back into business, fast. Too many jobs in China lost. Commerce Department has been instructed to get it done!”

Today, Reed joined several colleagues in sending a letter the Secretaries of the Treasury and Commerce Departments and to the U.S. Trade Representative expressing concern over reports that they are entertaining China’s request to loosen tech transfer rules for China, writing: “we strongly urge you to reject any proposal by China to loosen existing restrictions on the export or other transfer of these sensitive U.S. technologies.  Any such move would bolster China’s aggressive military modernization and significantly undermine long-term U.S. national security interests.”

The letter, which was led by U.S. Senator John Cornyn (R-TX) also noted: “In addition, we urge you not to compromise lawful U.S. 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 U.S. from a country like China that is ruled by a Communist dictatorship.”

Additionally, Senator Reed authored two successful amendments with Senator Mark Warner (D-VA) to the underlying Foreign Investment Risk Review Modernization Act (FIRRMA) legislation to enhance national security by improving cooperation with our allies and focusing efforts on identifying emerging and foundational technologies.