US Cuts A Deal With Chinese Smartphone Maker ZTE.
KING: Welcome back. The Trump administration struck a big deal with China today, ignoring threats of a revolt in Congress. The Commerce Secretary says Chinese telecom giant ZTE gets a clean stake after agreeing to pay take $1 billion fine to bring in an American monitoring team and to replace its board chairman.</s>WILBUR ROSS, COMMERCE SECRETARY: It is imposes the most strict compliance that we've ever had with any company, American or foreign. I think this is a very, very well publicized, very important message to other parties, don't fool around with our export controls, or you're really going to get hurt.</s>KING: If you haven't been tracking this, ZTE was officially walled out of buying American parts because it violated U.S. sanctions against Iran and North Korea. But that cheating is a secondary point for ZTE critics in Congress. They say the company is part of China's intellectual property theft and China's global espionage network. But the President cutting this deal knowing, and we see it already, that both Democrats and Republicans in Congress are saying, "We will try to stop you."</s>KAPUR: Call me skeptical that there will be a serious revolt in Congress. I mean, there will be a lot of sternly worded statements. There'll be a lot of criticisms from Democrats. I think Chuck Schumer, the Democratic leader in the Senate, is saying the President wants to make China great again. And that you'll see real this time from Republican members. The question is, is Speaker Ryan going to put something on the House to try to confront the President? Is Majority Leader McConnell going to put something on the Senate that goes against the President? Within six months of an election, were they know they need him and they need his base and he cannot afford to take him on? I think no matter what the disagreement is on tariffs, Republican leaders, strong leaders, agree with the President. They have suggested they're not going to, you know, try to legislatively stop him. So call me skeptical that they won't.</s>BALL: But the one time that they have done that was on Russia, and that was a sanctions issue. And that was an overwhelming vote because that was actually a policy issue that really motivates a lot of Conserves and Republicans, and they're very unified on it. And so unlike many other private disagreements that they have with the President, you know, free trade in China is an area where you do hear them speaking out much more and much more overtly disagreeing with the President then on a number of other issues. Now, I thought it's probably right that they won't actually do anything but you are hearing more dissent. And it's a fascinating dichotomy in the President's policy that they'd played out, that on the one hand, we were just talking about how he hasn't been afraid to be tough with the Europeans and to followthrough on his isolationism and some unilateralism. On the other hand, with China where he had so much tough rhetoric, probably the toughest outside of Mexico --</s>KING: Where they campaign, yes.</s>BALL: -- he has these other objectives that he wants. He wants this North Korea summit. He wants to achieve this breakthrough that other presidents failed to achieve. And, you know, we can sit here and say, "Oh, he's not doing this normally but the normal channels haven't worked."</s>KING: Right.</s>BALL: He's doing something different, but those objectives are at odds and it's been fascinating to see him try to split the difference, or in the eyes of some, go soft on China.</s>KING: And he's soft on China for his playbook. There's also this group, and this predates President Trump but it's been exacerbated under President Trump because of this ZTE thing. This group had says the United States government is just failing to take seriously the national security threat from Chinese technology. Marco Rubio among them, saying the deal with ZTE may keep them from selling to Iran and North Korea. That's good, but there will be nothing to keep -- do nothing to keep, let's say, from corporate and national security espionage. This is dangerous. Now Congress needs to act to keep America safe from China. I assure you with 100 percent confidence, ZTE is a much greater national security threat than steel from Argentina or Europe, very bad deal. This is a point they've been making for years, that China is, A, from intellectual property perspective, steals anything it gets its hand on and, B, uses these technology companies to listen, to snoop, to spy and to steal.</s>SHEAR: And the irony of this deal announcement on ZTE coming the day before he leaves for this G7 Summit where the Europeans and the Canadians are already furious that the President would say that somehow they're steel and aluminum imports are national security threats when then he goes, and on an issue that there is great consensus really is a national security threat, he says, "That's OK. You know, it's a little fine." You know, I mean, I don't mean to minimize the deal, but from the view of the Europeans and the Canadians, that's crazy.</s>KING: That's an excellent standpoint (inaudible).</s>KAPUR: That's the irony here, the trade war with China is on hold. The trade war with American allies, Canada, Mexico and Europe, is moving forward. China, of course, holds the keys President Trump's plans on North Korea.</s>KING: We'll watch it play out. All fascinating we put it together. Up next, the President's polls numbers are up. But that's not necessarily good news as Republicans try to keep their hold on Congress.