Published: Wed, June 13, 2018
Global News | By Blake Casey

The Senate wrecked Trump’s deal to save ZTE

The Senate wrecked Trump’s deal to save ZTE

Trump's ZTE deal that would save the company may not happen after all.

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.

Senators on both sides of the aisle introduced legislation that would block the deal. The ban would essentially cripple ZTE to the point of potential bankruptcy. The new punishment would require a restructuring of ZTE's management, a $1 billion fine, and $400 million to be held in escrow as a deterrent for ZTE from violating laws again.

"The fact that a bipartisan group of senators came together this quickly is a testament to how bad the Trump administration's ZTE deal is and how we will not shy away from holding the president's feet to the fire when it comes to keeping his promise to be tough on China", Schumer said.

Once the defense legislation passes the Senate, it must be reconciled with the House version of the bill before it can be sent to the White House for Trump's signature or veto.

ZTE is back in business: What now?

The United States government has rescinded the devastating sanctions it handed down to Chinese telecom ZTE just weeks ago, reversing its outright technology export ban. It's a stunning turnaround, though it had been signalled for some weeks.

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Rubio, a Republican from Florida, is co-sponsor of the amendment, with Senators Chris Van Hollen, a Democrat from Maryland, and Tom Cotton, a Republican from Arkansas.

Lifting the ban under Trump's deal would result in ZTE still buying from U.S. suppliers, but paying massive fines upwards of $1 billion with USA law enforcement monitoring the company's actions.

The move came amid lawmakers' escalating objections on national security grounds to Trump's softening on ZTE since last month. 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.

Sen. Marco Rubio (R., Fla.) said that Trump's penalties on ZTE are "severe, I don't think there's any debate about that".

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.

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

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