UPDATED 22:14 EDT / JUNE 18 2018

INFRA

Senate votes to block President Trump’s deal to save China’s ZTE

The Senate voted Monday to block a deal by President Donald Trump’s administration that would have removed crippling sanctions on the Chinese telecommunications giant ZTE Corp.

Senators voted to pass an annual defense policy bill that comes with a provision ensuring that penalties against ZTE will remain in place, in spite of a deal reached by Trump with the Chinese government earlier this month to remove them.

The bill, passed 85-10, comes just two days before Trump is due to host Republican members of Congress to discuss ways that would allow ZTE to resume business with entities in the U.S.

The sanctions were originally imposed on ZTE back in April, when the Commerce Department barred American firms from exporting to the company for a period of seven years. The ban came after ZTE was found to have failed to adhere to an agreement made with the government after it pleaded guilty last year to illegally shipping goods to Iran and North Korea and paid $1.19 billion million in fines.

Monday’s bill not only ensures the Commerce Department’s sanctions remain in place, but it also bans government agencies from buying or leasing equipment and services from ZTE and another Chinese company, Huawei Technologies Co. Ltd. The bill also bans the U.S. government from subsidizing or providing loans to either company.

Support for the provision was led by a coalition of senators including Charles Schumer (D-New York), Chris Van Hollen (D-Maryland), Senator Mark Warner (D-Virginia), Tom Cotton (R-Arkansas) and Marco Rubio (R-Florida). Shortly after the bill was passed, Senator Warner tweeted the following triumphant message, warning the Trump administration against any further measures to remove the restrictions on ZTE:

However, the White House has already indicated that it would try to remove the provision from the final bill. “The Administration will work with Congress to ensure the final NDAA conference report respects the separation of powers,” Hogan Gidley, a deputy press secretary for the White House, said in a statement to media last week.

Separately, Bloomberg reported that Trump will meet with Republican members of Congress on Wednesday, when he will attempt to remove the provision from the House’s version of the bill, which needs to be reconciled with the Senate’s version before being passed into law.

Last week, Senator David Perdue (R-Georgia), an ally of Trump, had unsuccessfully attempted to remove the provision, saying it would “trample on the separation of powers and undercut the Trump administration’s authority to impose these penalties.”

The political maneuverings come after Trump personally intervened in the drama, negotiating a deal with ZTE that would see the sanctions lifted in exchange for the company paying a $1 billion fine. The deal also stipulated that ZTE create a new “compliance team” made up of people selected by the U.S. government, which would work within its organization.

ZTE, which sources a considerable amount of its manufacturing components from U.S. companies, earlier announced it had been forced to cease major operating activities in response to the export ban.

Image: Servicesmobiles/Flickr

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