Trump signs USD 716 bn defence bill with watered-down China measures

Washington: US President Donald Trump signed a USD 716 billion defence policy bill on Monday that authorises military spending and includes watered-down controls on US government contracts with China’s ZTE Corp and Huawei Technologies Co Ltd.

Trump signed the law at the US Army’s Fort Drum base in upstate New York on his way back to Washington after a 12-day working vacation at his golf club in New Jersey. The bill was named for one of Trump’s political critics, the ailing US Senator John McCain of Arizona, but he did not mention McCain’s name.

McCain said in a statement he was “humbled” the bill was named after him, adding that it will address “a growing array of threats.”

Trump later made a reference to McCain at a political fund-raiser in Utica, New York, knocking him - as Trump does repeatedly - for voting against a bill to repeal parts of President Barack Obama’s signature healthcare reform law last year.

Even though Trump said the bill “is the most significant investment in our military and our war-fighters in modern history,” Obama’s first three defence budgets were larger, when adjusted for inflation, according to Todd Harrison at the Washington-based Center for Strategic and International Studies.

Weak on China

Some lawmakers wanted to use the bill to reinstate tough sanctions on ZTE to punish the company for illegally shipping products to Iran and North Korea, but the restrictions included in the final National Defense Authorization Act, or NDAA, that passed Congress were weaker than earlier versions of the bill.

Trump has lifted an earlier ban on US companies selling to ZTE, allowing China’s second-largest telecommunications equipment maker to resume business and putting him at odds with both Republican and Democratic lawmakers.

Leaders of US intelligence agencies have said they are concerned that ZTE, Huawei Technologies Co Ltd and some other Chinese companies are beholden to the Chinese government or Communist Party, raising the risk of espionage.

In response to the bill, Huawei said in a statement to Reuters, “Huawei supports the US government’s goals for better security, but this random addition to the NDAA is ineffective, misguided, and unconstitutional.”

“It does nothing to identify real security risks or improve supply chain security, and will only serve to stifle innovation while increasing internet costs for US consumers and businesses,” Huawei said.

The White House opposed putting stronger measures against the companies in the bill, and the measures were softened before lawmakers held their final vote.

The NDAA does strengthen the Committee on Foreign Investment in the United States (CFIUS), which reviews proposed foreign investments to weigh whether they threaten national security. That measure was seen as targeting China.

Separately, the NDAA authorizes spending USD 7.6 billion for 77 F-35 Joint Strike Fighter jets, made by Lockheed Martin Corp.

The bill also directs the Secretary of Defense to study whether Turkey’s planned deployment of the Russian-made S-400 missile defense system will risk the security of several US-made weapons used by Turkey, including the F-35 jet. The mandate to produce a study came after an earlier version proposed to bar the delivery of F-35s to Turkey.

Prior to the ceremony Trump watched an air assault demonstration by US troops at Fort Drum.

China angered at new defence act

China on Tuesday condemned measures targeting it in the new US defence act, saying it would comprehensively assess aspects that beef up the role of a key panel tasked with reviewing foreign investment proposals

China’s commerce ministry said it had noted the inclusion of CFIUS in the act and would “comprehensively assess the contents” paying close attention to the impact on Chinese firms.

“The US side should objectively and fairly treat Chinese investors, and avoid CFIUS becoming an obstacle to investment cooperation between Chinese and US firms,” it said in a short statement.

Chinese and US companies seek greater cooperation on investment, it added, urging the two countries’ governments to heed the voices of their companies, and provide a good environment and stable expectations.

Monday’s legislation also calls “long-term strategic competition with China” a top priority for the United States, which should improve the defence capabilities of self-ruled Taiwan, claimed by China as a wayward province.

In a separate statement, the foreign ministry said the United States passed the act despite China’s strong objections and it was dissatisfied with the “negative content related to China”.

China urges the United States to abandon Cold War thinking and correctly and objectively view relations, and not implement the act’s negative clauses about China, so as to avoid harming cooperation, the ministry added.