President Donald Trump is one step closer to realizing his goal of helping Chinese telecommunications giant ZTE resume business as usual: The company has signed an agreement in principle, according to Reuters, that would see the U.S. Commerce Department return ZTE’s ability to buy from American suppliers.
ZTE ceased major operations since the seven-year ban was imposed on the company in April for breaking a 2017 agreement reached after it was caught illegally shipping goods to Iran and North Korea.
According to the agreement, ZTE will incur $1 billion in fines, with another $400 million placed in escrow to cover future violations, sources familiar with the matter told Reuters.
The Commerce Department plans to amend its 2017 settlement agreement and count the $361 million ZTE paid as a part of that, allowing the United States to claim a total penalty of as much as $1.7 billion, the sources said.
Over the weekend, ZTE signed the agreement drawn up by the United States, the sources said, but the amended settlement has not been signed.
As part of the deal, sources said, ZTE promised to replace its board and executive team in 30 days. It would also allow unfettered site visits to verify that U.S. components are being used as claimed by the company, and post calculations of U.S. parts in its products on a public website, they added.
Trump’s plan to help the Chinese company has been criticized by both Democrats and Republicans in Congress, as ZTE has been labeled a national security threat.
“By letting ZTE off the hook, the president who roared like a lion is governing like a lamb when it comes to China,” U.S. Senate Democratic leader Chuck Schumer said in a statement in response to Reuters’ report of the preliminary agreement. “Congress should move in a bipartisan fashion to block this deal right away.”
The deal also comes as China rubber stamped several new trademarks for White House adviser Ivanka Trump’s fashion brand, as well as pledged $500 million in financing for an Indonesian resort which will feature Trump-branded properties.