U.S. Senate rebukes Trump, reimposes sanctions on ZTE

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Almost two weeks ago, Ross announced in a Commerce Department statement that ZTE "agreed to severe additional penalties and compliance measures to replace the U.S. Commerce Department's Bureau of Industry and Security (BIS) denial order imposed as a result of ZTE's violations of its March 2017 settlement agreement". Though the House didn't include a similar measure on the ZTE ban, both bills would block the United States government from using equipment from ZTE or Huawei - another Chinese telecom often cited by the U.S. government as a security risk - or subsidising either company.

On Monday night, the Senate tried to take control of the situation by passing the annual National Defense Authorization Act, which included an amendment to stop Trump's deal allowing USA companies to trade with ZTE.

"ZTE has violated USA sanctions, lied about it, but even more importantly, its technology has been deemed a national security threat by the FCC, the Federal Bureau of Investigation and the Pentagon", Schumer said.

The US government placed a ban on ZTE earlier this year, but the Trump administration reached an agreement to lift the ban while it is negotiating broader trade agreements with China and looking to Beijing for support during negotiations to halt North Korea's nuclear weapons program.

ZTE was first slapped with the seven-year ban back in April, after it was caught buying U.S. components, incorporating them into its equipment and illegally shipping them to Iran and North Korea.

The US Senate passed a $716 billion (RM2.86 trillion) defense policy bill on Monday, backing President Donald Trump's call for a bigger, stronger military but setting up a potential battle with the White House over Chinese telecommunications firm ZTE Corp.

Marco Rubio (R-Fla.), Tom Cotton (R-Ark.), Chris Van Hollen (D-Md.), and Chuck Schumer (D-N.Y.), along with co-sponsors Richard Blumenthal (D-Conn.), Susan Collins (R-Maine), and Bill Nelson (D-Fla.), introducing an amendment to the NDAA that would restore penalties on ZTE for violating export controls.

Some of the loudest criticism came from Sen.

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The bill also includes a section that prevents the Secretary of Defense from purchasing any equipment or doing any business with ZTE, and Huawei.

"This is the first time Congress has really stood up to him on a trade issue, and it's clear they are angry", said Bill Reinsch, a senior adviser at the Center for Strategic and International Studies in Washington.

The House of Representatives has passed its own version of the bill, and the two measures must now be reconciled before a compromise measure can be passed and sent to Trump for his signature or veto.

And boy, that's when things will get interesting.

Since trading resumed last week, ZTE has lost 38% of its market value or more than US$7 billion.

Senators on both sides of the aisle immediately threatened to stop the deal and reinstate the ban, citing ZTE as a national security risk.

The bill also authorizes the FY2019 personnel strength for active duty and reserve forces and sets forth policies of military personnel, acquisition policy and management, worldwide programs, and National Guard and Reserve Forces facilities, say officials.

Furthermore, Trump has been ratcheting up his threats of imposing harsh tariffs on China for months. A settlement was deemed a key Chinese demand as the world's two largest economies try to avoid a trade war and negotiate the denuclearization of North Korea. Why ZTE holds a special exemption for Trump's ire is still unclear.

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