The U.S. slapped sanctions on ZTE in 2016, prohibiting the company from doing business in the U.S. for seven years, when it violated U.S. sanctions against Iran and North Korea. The Commerce Department ban arose from a controversy in which ZTE failed to punish employees who were involved in illegally shipping USA equipment to Iran and North Korea.
ZTE halted most of its operations in May after the Trump administration blocked U.S. firms from selling or providing services to the telecom giant, but U.S. Commerce Secretary Wilbur Ross said last week that the company and the United States had reached a deal after Trump pledged to help the company get back into business.
"Great news! Our bipartisan amendment restoring penalties on #ZTE is included in the #NDAA bill the Senate will be advancing to later this evening", Senator Marco Rubio said in a Twitter post.
He said the speed of the pushback, and the striking bipartisan coalition - chief sponsors include Sen.
Once through the Senate, the bill would move to a conference committee with the House, which passed its own version of the bill without the amendment related to ZTE.
As Senator Tom Cotton (R-Arkansas) puts it, "I would expect that there wouldn't be a ZTE".
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The authorization must pass both houses of Congress.
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.
President Donald Trump, however, swooped in to save ZTE after negotiating with the Chinese government. In early June, the White House announced ZTE would be able to resume buying US parts after it agreed to pay a $1 billion fine and submit to USA oversight.
The White House didn't respond Monday evening to a request for comment on the Senate's pushback. The amendment also bans USA government agencies from buying or leasing equipment from ZTE and its Chinese rival, Huawei, and bars US loans to the companies.
"The Chinese government uses these companies for espionage and intellectual property theft, posing a direct threat to our national security and endangering the American people and our economy", said Sen. The idea of ZTE being used as a bargaining chip in trade negotiations with China angered lawmakers, who view the company as a national security issue. Rubio supports the new language in the defense bill.