US Senate passes ZTE sanctions, bill now goes to committee

Senate Set to Block White House on Reviving Trade Deal with ZTE

ZTE essentially shutdown operations in May after it was banned from importing United States components for seven years for misleading regulators about violating sanctions on North Korea and Iran.

On Monday evening, the Senate put the kibosh on Trump's deal to throw the Chinese telecommunications company ZTE a lifeline.

The Senate voted 85 to 10 in support of reinstating the ban.

The Commerce Department earlier this month announced a deal to pull ZTE out from under the weight of sanctions, after Trump in May vowed to help the telecom company, which has been the subject of equipment bans for suspected espionage as well as a violator of Iran and North Korea sanctions, get back on its feet.

Once the bill leaves committee, President Trump must either sign it into law or veto it.

The damage to stocks spread further when US trading opened on Tuesday, with shares of more than half a dozen companies doing business with ZTE dropping by between 1.5 per cent and 5 per cent. "It is vital that our colleagues in the House keep this bipartisan provision in the bill as it heads towards a conference". The company has lost almost two-thirds of its value since it resumed trading last week after a two-month suspension that followed the initial ban.

The Trump administration wants legislators to modify the Senate language on ZTE in the defense bill, once the House and Senate begin work to merge their versions of the legislation.

At Trump's urging, ZTE and the US Commerce Department reached an agreement on June 7 to have the ban lifted.

Cornyn told reporters that government procurement "is much more sensitive when it comes to national security".

Lawmakers in Washington voted to reinstate the ban that prevents the technology giant from buying USA components and software after breaking an agreement for violating sanctions on Iran and North Korea. So if he vetoes the defense spending bill because of a ZTE provision, that move could be seen as prioritizing a personal favor to the Chinese government above national defense - and above any actual conviction about using sanctions to impose USA will around the world. It might all depend on the group of Republican lawmakers involved in writing the provision who are now scheduled to meet with the President on Wednesday.

But before it can become law, the Bill must be reconciled with one already passed by the House of Representatives that does not include the amendment.

Shares of ZTE Corp and its American business partners took a hit on Tuesday after the U.S. Senate's passage of a defence bill set up a potential battle with the White House over whether the Chinese telecoms firm can resume business with U.S. suppliers.

Related news: