House in No Hurry to Confront Trump Over ZTE Deal

Few Republicans are willing to champion a Senate-crafted amendment to block the White House’s reprieve for the Chinese telecom company.

AP Photo/Ng Han Guan
June 28, 2018, 8 p.m.

The Trump administration is wrapping up a controversial sanctions-relief deal with Chinese telecommunications firm ZTE—and most House Republicans are looking the other way.

It’s a far cry from the reaction in the Senate, where lawmakers from both parties continue to rail against President Trump’s unexpected announcement of the agreement in May. Led by Republican Sens. Marco Rubio and Tom Cotton and Democratic Sen. Chris Van Hollen, the Senate worked feverishly to sever ZTE’s lifeline, ultimately passing an amendment in the National Defense Authorization Act that would ostensibly block or reverse the bailout.

But the House Republican leaders most likely to wield substantial clout in the coming NDAA conference committee are so far either ambivalent or outright opposed to tying Trump’s hands when it comes to ZTE.

“There’s no champion in the House,” said Paul Triolo, an expert in Chinese tech policy at the research firm Eurasia Group. “There’s no Rubio or Cotton or Van Hollen.”

Absent that champion, Triolo sees little chance that the House will join the Senate in opposing the president’s plan to rescue ZTE. “Our sense is that there’s just not enough critical mass in the House to really generate big pushback on this, and defy the president on this,” he said.

Congressional skepticism over ZTE’s activities in the United States has simmered for years, with lawmakers in both chambers accusing the company of building “backdoors” in America’s telecommunications infrastructure through which the Chinese government could spy on targets or even bring down parts of the telecom grid.

Those worries have escalated as anxiety over China’s burgeoning tech industry swept Capitol Hill this year. And after an April decision by the Commerce Department slapped a crippling seven-year ban on ZTE’s U.S. operations for violating sanctions law and then lying about it, many senators in particular seemed eager to watch the company collapse.

But that’s before Trump stepped in with an unusual offer, promising to waive the ban in exchange for the payment of a fine and, presumably, a better deal with the Chinese government’s trade negotiators. That deal is rapidly nearing completion, with ZTE having agreed to pay a $1 billion fine and place an additional $400 million in escrow in the U.S.

That’s good enough for some House Republicans, including Energy and Commerce Chairman Greg Walden, who this week told National Journal that he believed that the administration reached “an appropriate agreement to rein in the bad behavior of ZTE.“

“I know ZTE has put $400 million in escrow here in the United States, in case it’s discovered they cheat or have cheated again,” Walden said. “And if they get a new board, new management team and all—it seems like, you know, that the administration’s negotiated a pretty good agreement.”

Kevin Brady, the chairman of the House Ways and Means Committee and a top Republican voice on trade, said this week that he “honestly [hasn’t] spent much time looking at the issue recently.” Brady wouldn’t say whether he opposed the Senate’s ZTE amendment or considered ZTE a national security threat, but told National Journal earlier this month that his “default” was to give the White House space to conduct “diplomatic trade-offs.”

House Armed Services Chairman Mac Thornberry repeatedly refused to say anything about the ZTE amendment this week, citing a personal policy of not commenting on issues before a conference committee. Thornberry spokesman Claude Chafin said the chairman believes that ZTE is a national security threat, pointing to language in the House NDAA that blocks federal agencies from using ZTE products.

Insofar as there is a House Republican effort to push back on the president’s ZTE deal, it appears to be coming from the margins. Steve Chabot, the chairman of the House Small Business Committee, held a hearing Wednesday on ZTE’s threat to America’s small businesses. He criticized the White House’s move to grant it a reprieve, saying the decision “could ultimately put Americans at risk.”

ZTE is primarily a manufacturer of wireless and telecommunications hardware and equipment, and has never been accused of targeting American small businesses for cyberattack. After the hearing, Chabot was asked whether he believed that committees with more obvious national security equities should be taking a closer look at ZTE’s alleged espionage operations.

“I would not at all accuse any of the other committees for not taking anything seriously,” Chabot told National Journal. “I have the utmost respect for those committees and their chairs and their members on both sides of the aisle. How’s that for diplomacy?”

Chabot said he would support the Senate’s ZTE amendment during the NDAA conference committee, which lawmakers hope to wrap up by the end of July.

While senators continue to harp on the security threat posed by ZTE, many House Republicans appear either less aware of, or less concerned by, the classified allegations.

“I’m not on the intelligence committee. If they want to read me in on other issues I’m not aware of …” said Walden, before trailing off. The chairman later added that he’s “always looking at the balance between international commerce and national security.”

A spokesman for Devin Nunes, the chairman of the House Permanent Select Committee on Intelligence, did not respond to a request for comment. Adam Schiff, the panel’s ranking Democratic member, said he has no objection to reading Walden or others in on the classified intelligence around ZTE. But, he added, it’s “pretty obvious what the concerns are.”

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