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Senate to include measure blocking Trump's ZTE deal in defense bill

| Monday, June 11, 2018, 8:21 p.m.
A woman passes by a ZTE building in Beijing, China. Chinese tech giant ZTE Corp.'s chairman promised no further compliance violations and apologized to customers in a letter Friday, June 8, 2018, for disruptions caused by its violation of U.S. export controls, a newspaper reported.
Ng Han Guan | AP
A woman passes by a ZTE building in Beijing, China. Chinese tech giant ZTE Corp.'s chairman promised no further compliance violations and apologized to customers in a letter Friday, June 8, 2018, for disruptions caused by its violation of U.S. export controls, a newspaper reported.

WASHINGTON — The Senate plans to challenge President Trump's pledge to lift certain restrictions against Chinese telecom giant ZTE by including a measure in the annual defense bill that would effectively block the deal from being implemented.

The bipartisan amendment would reimpose penalties on ZTE for violating U.S. sanctions against exporting to Iran and North Korea that the Trump administration sought to lift in exchange for the company paying a $1 billion fine and funding an in-house compliance team of U.S. officials. It would also ban U.S. government agencies from purchasing any devices or services from ZTE or Huawei, another major Chinese telecom firm, or using government loans to subsidize any subsidiaries or affiliates of the two companies.

"It's only prudent that no one in the federal government use their equipment or services and that they receive no taxpayer dollars," said Sen. Tom Cotton, R-Ark., one of the chief authors of the amendment. "Given their repeated violations of U.S. law, we cannot trust them to respect U.S. national security, and so it's vital we hold them accountable and pass this amendment."

Trump has come under scathing criticism from members of his own party, who viewed the president's efforts to help ZTE as anathema, both economically and in terms of national security.

"These companies have direct links to the Chinese government and Communist Party. Their products and services are used for espionage and intellectual property theft," said Sen. Marco Rubio, R-Fla., another chief backer of the amendment. He stressed that lawmakers must "remain clear-eyed and unified on the threat China poses to U.S. interests and national security," even if the president wasn't.

Cotton, Rubio, along with Sen. Chris Van Hollen, D-Md., and Senate Minority Leader Charles E. Schumer, D-N.Y., filed their amendment to claw back the Trump administration's ZTE deal the same day it was announced. The move by senators on Monday to include it in the annual, must-pass defense bill was made just hours before Trump meets with North Korean leader Kim Jong Un. North Korea is largely dependent on economic ties with China, where leaders had claimed that absent a ZTE deal, the telecom giant would collapse.

Despite bipartisan support for the measure, Republicans are divided over whether it is wise to cross the president on this matter — and it is not clear that the effort to stymie Trump's deal will make it to the final version of the defense bill.

The measure is being included as part of a package of changes agreed upon by committee leaders, meaning that the Senate is likely to include it as part of the defense bill later this week. But the Senate's bill must still be reconciled with the version of the defense bill that passed the House last month. That version prevents the government from purchasing ZTE and Huawei products — but doesn't reimpose the sanctions-related restrictions lifted under Trump's deal.

Republicans hoping to avoid a direct clash with the White House over the ZTE deal are eyeing that reconciliation process to mitigate the Senate's latest step.

"We're just continuing the conversation," said Sen. John Cornyn, R-Texas. "There'll be a conference between the House and the Senate on the defense authorization bill ... I want to keep the conversation going."

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