Senate blocks ZTE deal in rebuke of Trump deal

Senate blocks ZTE deal in rebuke of Trump deal

The administration wants to change legislative language in a defense spending bill before the Senate, but will intervene later in the legislative process, the Journal said, citing a senior White House official.

The president's deal with ZTE would have forced the company to pay a $1 billion penalty, reorganize its company and allow US compliance officers in exchange for being able to sell its products inside the U.S. But the Senate's bill must still be reconciled with the version of the defense bill that passed the House last month.

But Trump then announced in mid-May that he was working with Chinese President Xi Jinping to find a way to get ZTE back into business. And because many items covered in the bill are popular with members of both chambers, most Senators expect the bill to pass Congress and be signed into law by the president.

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The Senate plans to challenge President Trump's pledge to lift certain restrictions against Chinese telecom giant ZTE by including a measure in the annual defense bill that would effectively block the deal from being implemented. It's a stunning turnaround, though it had been signalled for some weeks.

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Confirming details of the US deal, ZTE said late on Tuesday it would replace its board of directors and that of its import-export subsidiary ZTE Kangxun within 30 days of the June 8 order being signed by the United States.

Republican and Democratic senators who support the original ZTE punishments feel strongly that ZTE's flagrant violations deserve the ultimate punishment, and not a "slap on the wrist" fine.

Sen. Marco Rubio (R., Fla.) said that Trump's penalties on ZTE are "severe, I don't think there's any debate about that". The Commerce Department placed additional sanctions on the company after it failed to follow through with its reorganization plan and lied to the USA government about it.

But the bipartisan senate amendment, which has been added to the must-pass National Defense Authorization Act, would essentially kill that agreement by retroactively reinstating financial penalties and continuing the prohibition on ZTE's ability to sell to the US government.

The NDAA is considered a must-pass defense package; Senate Majority Leader Mitch McConnell announced on Monday that it is "the top item on our to-do list".

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