The new US defense law mitigates the control of contracts with ZTE and Huawei

The US President Donald Trump signed on Monday the bill for military spending worth 716 billion USD, which also provides less control over US government contracts with Chinese companies ZTE Corp and Huawei Technologies.

Donald Trump has identified the new budget as "the most significant investment in our army and soldiers in modern history", although Barack Obama's first three defense budgets were larger. Some US lawmakers wanted the law to be used to impose strict sanctions on ZTE for its commercial activities with Iran and North Korea, but the restrictions in the final version adopted by Congress were also weaker than earlier versions.

Donald Trump lifted the previous ban on US companies to trade with ZTE, allowing the second-largest Chinese telecoms manufacturer to continue its business, creating more critics in the face of representatives of both the Democratic and the Republican parties.

The managers of US intelligence agencies have already said they are worried about the relationship between ZTE, Huawei Technologies Co Ltd and some other Chinese companies with the Beijing government and the Communist Party as the risk of espionage increases.

In response to the adopted law, Huawei said they supported the US government's goal of better security, but the additional restrictions on Chinese producers are "ineffective, misleading and unconstitutional".

The White House opposed more stringent measures against companies, and the measures were softened before the final vote of the legislators. The new law also provides for greater powers for the US Foreign Investment Commission, which assesses the proposed investments to assess whether they do not jeopardize national security. This measure is perceived as targeting China.

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Posted from my blog with SteemPress : http://financeandmarkets.com/the-new-us-defense-law-mitigates-the-control-of-contracts-with-zte-and-huawei/

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