19 June 2018
| Alan Burkitt-Gray
The US Senate has voted 85 to 10 to reinstate the ban on US companies supplying ZTE with hardware and software.
Their action – by carrying
an amendment to a defence bill going through Congress
– means they have potentially overturned President
Donald Trump’s settlement of the dispute with
The Department of Commerce (DoC) placed a denial order on ZTE
in April as a punishment for supplying Iran and North Korea
with equipment that illegally included US components.
After Trump’s intervention, at the beginning of
the month ZTE agreed to pay a $1 billion fine and accepted
other penalties in order to get back in business. Now the
Senate’s action means the company may close down
The amendment was to the National Defense Authorization Act
(NDAA) for 2019, now being debated in both the Senate and the
House of Representatives. The House has yet to debate the
Four senators – two from each party – last
night welcomed the move. "We’re heartened that
both parties made it clear that protecting American jobs and
national security must come first when making deals with
countries like China, which has a history of having little
regard for either," they said. "It is vital that our colleagues
in the House keep this bipartisan provision in the bill as it
heads towards a conference."
The signatories of that statement included a Democrat Senator
for the state of New York, Chuck Shumer, who said in
yesterday’s debate: "One of the most concerning
issues is the decision by the Trump administration last week to
reduce the harsh penalties previously imposed and then to
provide relief to the Chinese telecom giant ZTE, lifting
restrictions on the company and allowing it to continue to sell
its products in the United States."
Shumer said: "ZTE was guilty of evading US sanctions on Iran
and North Korea and then lying to US officials about it
He claimed: "It seems the administration was outmanoeuvred by
the Chinese on ZTE once again. Congress should reverse what the
administration has done by reinstituting the hard penalties on
ZTE, and we should do it on the NDAA bill that will be on the
floor this week."
He said that this is "precisely related" to defence because
"cyber security experts, national security experts, principal
government agencies, the Republican-led FCC, the Republican-led
FBI, and the Republican-led Pentagon have all deemed the sale
of ZTE products in the United States a national security
The senator added: "Even if they hadn’t violated
sanctions and even if they hadn’t lied about it,
they shouldn’t be here. This gives the Chinese
Government – which in many ways takes advantage of the
United States militarily and economically and is spying on us
by cyber warfare – a great opportunity to get right
inside all of our communications."
According to this morning’s Wall Street Journal,
Trump is due to mean Republican senators today in an attempt to
find a way for ZTE to resume business.
House of Representatives and the Senate will need to coordinate
their versions of the NDAA before the act is passed into law.
Trump will have only two options: sign it, even with the
anti-ZTE clauses if they survive the coordination, or veto it,
which will leave the US military without funds for the next
Shumer called the $1 billion fine on ZTE "as weak as a wet
noodle". He urged fellow senators "to reverse the agreement
made by the administration and prevent it from being able to
provide ZTE relief for at least a year".