Schumer Floor Remarks On President Trump’s Deal To Save ZTE And Teachers’ Pay

May 22, 2018

Washington, D.C. – U.S. Senator Chuck Schumer today spoke on the Senate floor regarding President Trump’s weak approach to Chinese telecom company, ZTE and the importance of fair pay for teachers. Below are his remarks which can also be viewed here

“First, let me thank my friend from Georgia for being able to go, and my friend from Illinois, who’s been passionate, strong, and effective when it comes to these for-profit colleges, and he laid out a strong case. But let me just make one more point, which sometimes my colleagues on the other side of the aisle and in the Trump administration – Ms. DeVos – seem to forget. Who loses money when these for-profit colleges take advantage of the kids? The federal taxpayers, because the vast, vast majority, the overwhelming percentage of funds that go to these for-profit colleges are federal student loans. So, this is a waste of taxpayer money, and somehow our Republican colleagues – not all, some – and the Trump administration are willing to have the Treasury – basically, in certain ways – be looted, and they shrug their shoulders and let the for-profits keep doing it. It’s an amazing contradiction. So, I thank my colleague.

Now, Mr. President, on the issues I came to speak about here. Mr. President, it was reported by the Wall Street Journal that the Trump administration has agreed to relax sanctions on the Chinese telecom giant ZTE and remove the ban on ZTE from selling components and software in the United States. Instead, ZTE will be required to pay a fine and reorganize its board. It appears that in exchange, China will lift some tariffs on US agricultural products.

First, let me say this, I’ve said this repeatedly but I’ll say it again: I feel much closer in my views on China, in terms of how they treat us on economic issues, to President Trump – in his views – than I was to President Obama and President Bush in their views, who I don’t think did enough. And I have had public arguments with both President Obama and President Bush on this issue. So, when Donald Trump started talking about going after China and making them play fair, I felt that was a good thing, and when his administration fines ZTE and then puts sanctions on them so they couldn’t get American components, I said finally – finally – we’re doing something tough on China.

So, you can imagine my disappointment in the reports last night that President Trump, being advised so wrongly by people like Treasury Secretary Mnuchin, is backing off on this toughness, and giving them a slap on the wrist – the fine. If the reports are true, the Trump administration will have suffered a great defeat. The fines and board changes do nothing – absolutely nothing -- to protect American national or economic security. It’s my view that it’s the Chinese who proposed this because they know it doesn’t do the real job, and when President Trump shows weakness and backs off on the area he’s been toughest with China, it signals to them they can roll over us on issue after issue where they have been rapacious, in terms of how they deal with our economy, our intellectual property, the ability of great American companies to not sell things in China.

The April 2018 Commerce Order penalizing ZTE says plainly that past fines have not and will not deter ZTE – because they are financially backed by China’s government – and putting in place board changes doesn’t coerce a company that takes its orders from China’s government. The proposed solution is like a wet noodle. It’s outrageous, and I hope Democrats and Republicans will join together in making sure – as House Republicans did in the Appropriations Subcommittee – that the proposed sanctions against ZTE – not letting them buy American products, not letting them sell here – will stick, but I don’t think they will. All the handwriting is on the wall, and I won’t divulge but I did have a half hour conversation with President Trump about this Friday, and with some of his advisers. So, I am truly worried.

The penalties that are proposed by Secretary Mnuchin are penalties in name only, and they are a diversion from the fact that it seems President Xi has outmaneuvered President Trump and Secretary Mnuchin. The Art of the Deal – it should be President Xi that writes the book because he’s taken us to the cleaners on ZTE.

So, let me explain why this is such a bad deal.

ZTE was sanctioned in 2016 for violating US sanctions against North Korea and Iran. The company was further sanctioned when the Commerce Department discovered ZTE had lied to the U.S. about its plans to rectify the violations. And President Trump and Secretary Mnuchin, according to reports, have inexplicably excused ZTE of those inexcusable violations.

What the president and Secretary Mnuchin are doing sends a dangerous signal to businesses around the world that the United States is willing to forgive sanction violations or reduce penalties. It emboldens foreign companies to play fast and loose with US sanctions when we should be putting the fear of God into these companies, especially one that was as brazen as ZTE. If we don’t uniformly enforce sanctions -- a critical diplomatic tool used by administrations of both parties to pressure our adversaries – then they will be far less effective. None other than Secretary of State Pompeo and Interior Secretary Zinke wrote a letter to President Obama in 2016 making this point, urging him to crack down on ZTE for this reason. And imagine if President Obama were president today and doing this, you can be sure our Republican colleagues would be hollering. You can be sure that President Trump – he wouldn’t be president then – would be hollering.

Even more important are the national security implications of removing the ban on US companies selling ZTE components and software. This is the number one reason that I am opposed to any change in the sanctions on ZTE. Allowing ZTE to make deals with US companies to sell its products here would allow a foreign state-backed firm access to our telecommunications network, prying open the door for ZTE to steal American data, hack our networks, and even conduct espionage, both economic and national security.

Now, don’t take it from me. Here are what some of our leading Republicans have said in the administration. The Republican-led FCC has said that allowing ZTE into the United States would pose a national security threat, saying it would give state-backed Chinese companies “hidden backdoors to our networks” that would allow them to “inject viruses and other malware, steal Americans’ private data, spy on US businesses, and more.”

We all know that China is involved in stealing our intellectual property. There is no better way to do it than through ZTE, and we’re going to let them be here, and slap them on the wrist with a fine? That’s a dereliction of our duty here in the Congress, and it’s the president’s duty to protect us.

The Pentagon has banned ZTE phones saying in a statement “ZTE devices may pose an unacceptable risk to the department’s personnel, information, and mission.” If our Defense Department is banning these phones, why are we allowing them to come into the country and do industrial espionage, and steal our intellectual property from our companies?

Here’s what FBI Director Chis Way, appointed by President Trump, told the Senate Intelligence Committee in February. He said -- he was saying that we shouldn’t use ZTE products or services, period – here’s what he said: “We’re deeply concerned about the risks of allowing any company or entity that is beholden to foreign governments that don’t share our values to gain positions of power inside our telecommunications networks. That provides the capacity to exert pressure or control over our telecommunications infrastructure. It provides the capacity to maliciously modify or steal information. And it provides the capacity to conduct undetected espionage.” The head of the FBI says letting ZTE in here will provide “the capacity to conduct undetected espionage.”

So, after all those statements and so many more, every American should be alarmed by the reports that President Trump may allow ZTE into American markets. Putting our national security at risk for minor trade concessions is the very definition of short-sighted. And frankly, it would be a capitulation on the part of the Trump administration. President Trump’s instincts are to be tough on China, he should not let Secretary Mnuchin lead him astray, or others in the administration who may be urging it. I know that there are some – Mr. Lighthizer, Mr. Navarro – who understand the dangers here, and they’re in the administration too, and from press reports they’re arguing on the other side. President Trump ought to come to his senses, and stick with being tough on ZTE, stick with his instinct. That’s what I’d say to you, Mr. President. Please, stick with your instinct and be tough on ZTE, don’t let these other members of your cabinet lead you astray for short-term reasons that will hurt America dramatically in the long run.

The deal President Trump seems to be making is exactly the kind of deal that Donald Trump, before he was President Trump, would call “weak” or “the worst deal ever.”

I hope these reports aren’t true. But if they are, Democrats and Republicans must to do something about it. I know there are members on the other side – I saw Senator Rubio’s tweets this morning -- who are concerned about national security of the United States with respect to ZTE. So, I will be reaching out to my Republican colleagues and members of my caucus – anyone who is willing to turn this ship around – to see what we can do legislatively. You know, the Chinese are worried about their security -- it’s a different kind of security – they don’t want their citizens to get information. So, they exclude our best companies, our Googles and our Facebooks, and now they’re raising a fuss when we want to exclude ZTE, which has violated our sanctions and would allow the Chinese government to spy on us? What hypocrisy, how are we going to go along with that? I hope not.

Now, on another matter. Over the past few days, the White House has put extraordinary, unusual, and inappropriate pressure on the Department of Justice and the investigation into Russian meddling in the 2016 election.

On Sunday, the president demanded a counter-investigation of the Russia investigation, breaking longstanding and critical norms against political interference in law enforcement matters. Then yesterday, the president summoned the leaders of the Russia probe to the White House to pressure them into releasing sensitive and classified documents pertaining to the investigation to Congressional Republicans.

Let me repeat that: the White House plan to arrange a meeting where ‘highly classified and other information’ will be shared with members of Congress is highly irregular, inappropriate, and unprecedented. The president and his staff should not be involved in the reviewing or dissemination of sensitive investigatory information involving any open investigation, let alone one about the activities of his own campaign. It’s amazing. It is what you hear happening in third-world countries. The leader says, “Nope, I’m above the law,” and interferes with the process of law.

Congress has a right to oversight, and to know what’s going on after an investigation is complete. While an investigation is open and active, demands for oversight are tantamount to interference. Especially when the folks demanding the information are the most biased, irresponsible actors – a man like Rep. Nunes, who I hear privately from my Republican colleagues that he’s off the deep end, and he’s going to get ahold of this, and we think that’s for fair, unbiased oversight? Give me a break.

If such a meeting occurs – and I don’t believe it should, but if it occurs -- it must be bipartisan to serve as a check on the disturbing tendency of the president’s allies to distort facts and undermine the investigation and the people conducting it. Democratic members of the House and Senate, the analogues of the Republicans selected to be in the room should be in the room as well. So if Rep. Nunes is there, Rep. Schiff should be there. To me, it’s just amazing – amazing – that this is happening.

One further point, and again the contradictory statements and opinions, the virtual hypocrisy of President Trump on these issues is just mind-boggling. President Trump, for instance, has been peddling the myth that a “deep state” bias against his presidency has animated the Russia probe. Of course, the idea is ridiculous.

If there were such a deep state aligned against Donald Trump, why then was the active investigation into his campaign’s communications with Russian intelligence kept secret during the campaign? The deep state could’ve killed him in the election.

If there were such a conspiracy against Donald Trump, why was the FBI investigation of his campaign under wraps, while, at the same time, the FBI investigation into his opponent was in full view of the public eye? Whether you agree or not, Secretary of State and presidential nominee Clinton believes that those comments by the FBI about that investigation hurt her chances to win the election. You may agree or disagree, but one fact is incontrovertible: The FBI talked publically about the Clinton investigation, and was silent about the Trump investigation, and yet the president says that the deep state is out to kill him. It’s not fair, it’s not right, it’s contradictory.

The truth is that the President and his allies only concoct these conspiracies – totally contradicted by well-known facts – to kick up dust. To obscure and obfuscate. To distort and distract. And when that’s not enough, the president and his team directly interfere with the Russia investigation by asking its leaders to turn over documents to the most irresponsible actors in Congress, his ardent political allies.

It ought to stop. It ought to stop. The Justice Department doesn’t take demands from the president. The special counsel’s investigation must continue, in search of the truth, the whole truth, and nothing but the truth.

Finally, Mr. President, on the subject of teachers. For the better part of the 20th Century, being a teacher in America meant being a part of the middle class.  You worked hard and you received decent pay and benefits, enough to afford a home, a car, a vacation, and raise a family. But for the past twenty years teachers’ pay has been falling behind. A 2016 report from the Economic Policy Institute found that teachers take home weekly wages that are 17 percent lower than comparable workers. That’s why thousands of teachers across the country have organized and staged walkouts to demand fair pay, adequate resources, and better working conditions. I have always felt that teaching is a vital profession. I know how my teachers at P.S. 197, Cunningham Junior High School, and Madison High School affected me in such a positive way. They’re great, so I believe that in the 21st century should be an exulted profession, sort of like how doctor and lawyer was in the 20th century. It’s that important to the future of America, to the future of our children, to the future of our grand-children, but the pay sure doesn’t reflect it.

That teachers’ pay has fallen so far behind matters a great deal, not just to teachers themselves, but to all of us. Education is the catalyst for economic mobility; it puts rungs on the ladders of opportunity.  We need great teachers in every classroom so that our children have every opportunity to succeed.  In my view, as I said, teaching should be an exalted profession in the 21st Century, the way medicine and law were in the 20th century. And teachers’ pay should much more closely reflect their value to society.

So today, Democrats in the House and Senate will come together to announce our plan to offer our nation’s teachers a better deal.”   

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