Politics & Policy

Senate Votes to Reject Trump’s Deal With Chinese Telecom Giant

President Trump speaks to reporters after declaring his intention to withdraw from the Iran nuclear deal, May 8, 2018. (Jonathan Ernst/Reuters)

The Senate voted Monday to reinstate a ban on American companies selling parts to Chinese telecom giant ZTE after President Trump vowed to save the firm by lifting the ban as part of broader trade negotiations.

The measure, part of a larger, must-pass defense spending bill, now moves to the House after passing 85-10. Trump, who pledged to save ZTE after it was crippled by the American sales ban, is expected meet with Congressional Republicans to ask that they remove the ZTE provision when reconciling the House and Senate versions of the defense spending bill in the coming days.

The Trump administration barred ZTE from purchasing parts from American companies in April after the firm violated U.S. sanctions by dealing with North Korea and Iran.

Following the ban, Trump abruptly announced he wanted to help get ZTE “get back in business” as part of broader trade negotiations with Beijing. Earlier this month the Commerce Department carried out Trump’s public pledge, reaching a deal with ZTE that includes a $1 billion fine and a requirement that the sanctioned company take on a compliance team selected by the U.S.

The deal, which reportedly resulted from direct negotiations between Trump and Chinese president XI Jinping, also requires that the company place $400 million in escrow to cover any fines resulting from future violations.

Trump’s sudden turn toward cooperation with Xi angered Congressional hawks, including Sen. Marco Rubio (R., Fla.) who has argued that he is dangerously conflating trade issues with matters of national security. The defense spending bill reflects that position, citing ZTE’s access to American intellectual property as a threat to national security.

The bill, which supports a total of $716 billion in defense spending, also restricts Chinese business dealings in the technology sector and creates a new inter-agency process involving the Commerce, Defense, State and Energy departments to determine which technologies are safe for export.

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