Senators move to reverse Trump's deal lifting sanctions on China's ZTE

Blanche Robertson
June 13, 2018

Since the language is tucked into a larger defense bill, Trump would have no choice but to pass it.

Earlier this year, United States officials banned ZTE from working with U.S. companies - a move brought on by revelations that the company shipped US-made parts to Iran and North Korea and then lied about giving company executives involved with the deals large bonuses. The ban would essentially cripple ZTE to the point of potential bankruptcy. It would hurt ZTE for sure, but keep the company in business.

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White House trade adviser Peter Navarro on Sunday likened the deal to "three strikes you're out", referring to two prior violations ZTE committed under the sanctions agreement with the U.S. It's a stunning turnaround, though it had been signalled for some weeks.

Once through the Senate, the bill would move to a conference committee with the House, which passed its own version of the bill without the amendment related to ZTE.

Senators plan to add a provision in the National Defense Authorization Act (NDAA), an annual defense policy bill they're expecting to pass this week, that will ban U.S. suppliers from selling to ZTE, reported The Wall Street Journal. However, it wouldn't be the first time the President chose the unexpected route.

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AT&T wasn't on board, saying, "Divestitures here would destroy the very consumer value this merger is created to unlock". And the company said it plans to close the merger, which was announced a year and a half ago, on or before June 20.

Trump has come under scathing criticism from members of his own party, who viewed the president's efforts to help ZTE as anathema, both economically and in terms of national security.

After Mr. Trump stepped in, the Commerce Department changed its mind and ordered the $1 billion fine, and said the US would send a compliance team to oversee the company's operations. A Republican Senator from Arkansas says that ultimately he "would expect that there wouldn't be a ZTE" and that "the death penalty is an appropriate punishment for their behavior".

Senators in support of the original deal also think that it is unrealistic for US officials to police ZTE's future actions, as the Chinese company could still conduct improper business even under a watchful eye.

"Great news! Our bipartisan amendment restoring penalties on #ZTE is included in the #NDAA bill the Senate will be advancing to later this evening", Senator Marco Rubio said in a Twitter post. "For me, it was more than that".

Its cosponsors are Democratic Senators Chuck Schumer of New York, Richard Blumenthal of CT and Bill Nelson of Florida.

Senate Majority Leader Mitch McConnell (R., Ky.) said that passing the defense measure is at the top of his to-do list this week.

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