Senate Votes to Obstruct U.S. Deal on ZTE

The ZTE logo is seen on an office building in Shanghai on May 3, 2018. - Senior US officials arrive in Beijing for trade talks with China, as both sides dampen expectations for a quick resolution to the heated dispute between the world's two largest economies. (Photo by Johannes EISELE …

U.S. Senators from both sides of the aisle voted Monday evening to undo a Trump administration Commerce Department deal with Chinese telecommunications firm ZTE.

The blockade of a ZTE deal was neatly slipped into a massive defense bill that passed on a bipartisan 85 10 vote, according to the New York Times. 

The Trump administration levied heavy penalties on the Chinese telecomm company for violation of U.S. sanctions. The sanctions have essentially brought ZTE to its knees, halting major operations in May. President Donald Trump has indicated that Chinese President Xi Jinping personally asked him to come to an agreement with ZTE. Trump required that the company pay a hefty fine, change its management and board, and agree to close monitoring by U.S. officials.

The fine could ultimately reach $1.7 billion, $400 million of that is to be held in trust if ZTE was to violate terms of the deal.

The U.S. Commerce Department informed lawmakers of the provisions reached on the ZTE deal in late May. Sen. Marco Rubio was quick to lash back and indicated he would be part of taking action to undermine the deal. He was in step with New York Democrat Sen. Chuck Schumer who also signaled that congress would be acting to stop it.

Last week ZTE said it would pay $1.4 billion in fines to the U.S. within 60 days. That same day shares of the company’s stock began trading again for the first time since trading of its shares was suspended in April. The shares dropped more than 40 percent the day that trading of its stock resumed.

Trump administration officials have been engaged in a tense series of trade negotiations with China in recent months. Top trade officials from each nation have held negotiation meetings in both Beijing and Washington, DC. 

The U.S. has also levied tariffs on China, both those designed to circumvent China’s steel and aluminum dumping on the basis of national security and those aimed at stemming China’s theft of U.S. intellectual property and the massive U.S. trade deficit with China.

Follow Michelle Moons on Twitter @MichelleDiana 


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