Senate to vote on ZTE ban in defense bill this week

Lester Mason
June 13, 2018

After Trump announced his deal with China and ZTE last week, Senate leaders said they would seek to reverse it.

Under orders from Mr. Trump, the Commerce Department last week weakened penalties on ZTE, reducing a near-death sentence to a $1 billion fine and continued oversight. The U.S. export ban would be lifted in exchange for a $1 billion fine, $400 million in escrow to cover future issues, the naming of a new Board and executive team, and the installation of a U.S. selected compliance team that would be put in place at ZTE headquarters.

He said the speed of the pushback, and the striking bipartisan coalition - chief sponsors include Sen. Tom Cotton (R-Ark.), one of the chief authors of the amendment. Chris Van Hollen of Maryland, a liberal Democrat - shows how determined Congress is to block Mr. Trump.

The measure is being included as part of a package of changes agreed upon by committee leaders, meaning that the Senate is likely to include it as part of the defense bill later this week. Then the full bill will have to pass, and be merged with a version that passed the House earlier this year.

Trump has said he reviewed the penalties as a personal favor to Chinese President Xi Jinping.

The White House didn't respond Monday evening to a request for comment on the Senate's pushback.

The amendment will also ban government agencies from trading telecommunications equipment and services with Chinese telecom companies ZTE and Huawei, as well as from providing loans to or subsidizing either company, according to The Hill. Among other things, it would restore penalties on ZTE for violating USA export controls and bar US government agencies from purchasing or leasing equipment or services from the Chinese company.

Last week, ZTE agreed to pay up to US$1.4 billion in penalties to the U.S. government and said it would drastically overhaul its management and open its site to a US-appointed compliance team.

Lawmakers said they were shocked Mr. Trump was going soft, after all the tough talk of cracking down on China during the presidential campaign. Since the bill has bi-partisan support, rules tucked into the bill's language are much harder to prevent, even for the President. The intelligence community suspects the company's devices are mechanisms for espionage that can be remotely tracked and used to steal intellectual property. Marco Rubio (R-Fla.), another chief backer of the amendment.

The ban was placed on ZTE to punish it for violating USA sanctions.

Senators are looking to rein in those tariffs in the defense bill, too.

Other reports by Iphone Fresh

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