The Trump administration has struck a "definitive" deal with Chinese tech giant ZTE, Commerce Secretary Wilbur Ross announced Thursday, over strong congressional objections.
“At about 6:00 A.M. this morning, we executed a definitive agreement with ZTE and that brings, that brings to a conclusion this phase of the developing with them,” Ross said in an interview with CNBC.
According to the Commerce Department, ZTE will be required to pay a $1 billion fine, is replacing its management, and will submit to oversight from the U.S. Commerce Department in order to be relieved of the crippling punishments that had been slapped on the company for its previous evasion of sanctions placed on North Korea and Iran.
“We are literally embedding a compliance department of our choosing into the company to monitor it going forward they will pay for those people but the people will report to the new chairman because we are also having them replace the entire management and the entire board,” Ross said.
Ross had been instructed to look into easing restrictions on ZTE by President Trump, who had received a personal request from Chinese President Xi Jinping.
Ross touted the deal as a victory, saying the administration’s previous strict actions accomplished its goal in that it “brought … a $17 billion company to its knees more or less put them out of business” and that the new agreement is “something I think even more effective.”
He also warned that if the company is caught not complying to the letter of the new agreement, strict punishment will snap into place.
“Now, if they do violate it again, in addition to the billion dollars they're paying us right up front, we have them put $400 million in escrow so the total deal is a billion 400 million,” Ross said.
Many in Congress, both Republicans and Democrats have strongly opposed how the president was handling the ZTE matter -- and blasted the latest twist.
Senate Democratic Leader Chuck Schumer tweeted the "deal with ZTE proves the president just shoots blanks."
And a leading GOP critic, Florida Sen. Marco Rubio tweeted the the deal "will do nothing to keep us safe from coporate and national security espionage."