Published: Thu, June 21, 2018
Worldwide | By Myra Stephens

Trump meets with lawmakers after Senate blocks China ZTE deal

Trump meets with lawmakers after Senate blocks China ZTE deal

On Monday night, the Senate voted 85-10 for the annual National Defense Authorization Act, throwing the state-backed company back into the center of a bilateral trade war and reigniting uncertainty about the outlook for its crucial supply chain.

After admitting to selling US-made technology to Iran and North Korea, thereby violating U.S. sanctions, ZTE agreed to pay hundreds of millions of dollars in penalties and discipline the employees responsible.

This year, the Senate included an amendment that would kill the Trump administration's agreement to allow ZTE to resume business with U.S. suppliers, one of the few times the Republican-led Senate has veered from White House policy.

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.

Trump's Wednesday meeting was confirmed on Monday by Senate Majority Whip John Cornyn of Texas and may include other Republican lawmakers, such as Senator Lindsey Graham of SC. Instead of disciplining all employees involved, ZTE had paid some of them full bonuses and then lied about it, Commerce said. Under the current terms of the agreement, the Chinese company must replace the boards of directors of ZTE Corp. and ZTE Kangxun. The company quickly announced that it was halting operations. Of course, just because the Senate voted in favor of reinstating ZTE's ban doesn't mean it's already a done deal.

Depending on how far this new legislation gets, it is unclear if the ZTE ban will return, whether the new deal will be weakened or if Trump will continue as if nothing had happened.

ZTE has agreed to pay a $1 billion penalty and put $400 million in an escrow account in a US bank as part of the settlement reached on June 7 to allow it to do business again with USA suppliers. Commerce Secretary Wilbur Ross and Treasury Secretary Steven Mnuchin in recent weeks have tried to persuade lawmakers of the administration's approach to ZTE, but legislators said the deal failed to address their national-security concerns. Marco Rubio (R-Fl.) and Sen.

The bill says that based on the Taiwan Relations Act, the USA should support Taiwan's improvement of its defensive military capabilities and should work to streamline US arms sales to Taiwan based on the country's needs.

Reuters reports that President Donald Trump met with a Republican caucus of senators and House representatives this morning. Cornyn and other GOP senators, including Lindsey Graham of SC, are expected to attend.

The U.S. Senate has passed a major defense bill that would block the sale of U.S. F-35 fighter jets to Turkey unless it abandons a deal to buy S-400 missile-defense systems from Russian Federation.

"Unfortunately, that's exactly what this bill would do by removing congressional oversight for building future nuclear weapons", Feinstein said.

Sen. Dianne Feinstein, D-Calif., blasted the Senate bill, saying Congress should not cede its authority over nuclear weapons to Trump and future presidents.

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