Global News

White House to block Congress from stopping ZTE deal

White House to block Congress from stopping ZTE deal

That version prevents the government from purchasing ZTE and Huawei products - but doesn't reimpose the sanctions-related restrictions lifted under Trump's deal. This bill is usually passed easily with support from both sides of the aisle.

Since the language is tucked into a larger defense bill, Trump would have no choice but to pass it.

It would also ban US 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. The ban would essentially cripple ZTE to the point of potential bankruptcy.

Then, if the ZTE rollback is still in, it will become a major challenge to Mr. Trump, who personally stepped in as a favor to Chinese President Xi Jinping. In early June, the White House announced ZTE would be able to resume buying US parts after it agreed to pay a $1 billion fine and submit to USA oversight. It would hurt ZTE for sure, but keep the company in business.

The administration wants to change legislative language in a defense spending bill before the Senate, but will intervene later in the legislative process, the Journal said, citing a senior White House official.




ZTE is back in business: What now?

Investors wiped about $3-billion off embattled Chinese telecommunications giant ZTE Corp's market value as it resumed trade on Wednesday after agreeing to pay up to $1.4-billion in penalties to the USA government. It's a stunning turnaround, though it had been signalled for some weeks. But thanks a new bipartisan amendment to the upcoming "must-pass" National Defence Authorization Act, it seems ZTE's one remaining lifeline would disappear by retroactively reinstating the original seven-year ban.

As part of the US order, the Commerce Department also will select a monitor, known as a special compliance co-ordinator, within 30 days to report on compliance by ZTE and its affiliates worldwide for 10 years. However, it wouldn't be the first time the President chose the unexpected route. Although $1.4 billion is not a small amount of money, it sets the stage for other companies to also violate trade laws under the assumption that, at worst, they'll have to pay a hefty fine.

Confirming details of the USA deal, ZTE said late on Tuesday it would replace its board of directors and that of its import-export subsidiary ZTE Kangxun within 30 days of the June 8 order being signed by the United States.

As Senator Tom Cotton (R-Arkansas) puts it, "I would expect that there wouldn't be a ZTE".