Senators on both sides of the aisle introduced legislation that would block the deal.
Among other things, the measure would restore penalties on ZTE for violating export controls and bar USA government agencies from purchasing or leasing equipment or services from the Chinese company. The ban would essentially cripple ZTE to the point of potential bankruptcy.
Then, if the ZTE rollback is still in, it will become a major challenge to Mr. Trump, who personally stepped in as a favor to Chinese President Xi Jinping. 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.
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The Senate has adopted a measure to block a deal between the Trump administration and Chinese telecommunications company ZTE. The Senate version of the legislation must be reconciled with the House version before the two chambers can vote on the compromise measure later this year and send it to the White House for President Donald Trump to sign into law or veto.
ZTE is back in business: What now?
The ZTE leniency also rubbed senators wrong since it came about the same time the president slapped tariffs on steel and aluminum imports from USA allies including Canada and the European Union. It's a stunning turnaround, though it had been signalled for some weeks.
The move came amid lawmakers' escalating objections on national security grounds to Trump's softening on ZTE since last month.
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Last week, ZTE agreed to pay up to US$1.4 billion in penalties to the United States government and said it would drastically overhaul its management and open its site to a US-appointed compliance team. But after the US government determined the company lied about its clean-up efforts, the Commerce Department imposed the death sentence, banning USA businesses from selling parts to ZTE, effectively kneecapping the company. Senator Marco Rubio (R-FL) told the Wall Street Journal that he agrees the penalties are severe. "For me, it was more than that".
To save his ZTE deal, Trump would have to veto the entire defense-authorization bill, which would go against his long-standing statements on the military and US defense protocols.
Its cosponsors are Democratic Senators Chuck Schumer of New York, Richard Blumenthal of CT and Bill Nelson of Florida.
Sen. Tom Cotton, R-Ark., one of the amendment's co-sponsors, said that if it passes, ZTE will go out of business.
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