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Trump meets with lawmakers after Senate blocks China ZTE deal

Trump meets with lawmakers after Senate blocks China ZTE deal

Senators on both sides of the aisle immediately threatened to stop the deal and reinstate the ban, citing ZTE as a national security risk.

By the end of the month, with Trump's support, the Department of Commerce struck a deal (paywall) with ZTE, allowing it to resume purchasing from USA suppliers in return for a $1 billion fine and allowing Chinese-speaking U.S. compliance personnel to be installed in the company for a decade. The legislation, which is considered crucial for continuing defense funding, was passed with 85-10 votes, one of a handful of times the Republican-controlled Senate has deviated from a Trump policy.

The US government placed a ban on ZTE earlier this year, but the Trump administration reached an agreement to lift the ban while it is negotiating broader trade agreements with China and looking to Beijing for support during negotiations to halt North Korea's nuclear weapons program.

ZTE has paid the fine for violating United States trade laws and is in the final stages of arranging an account for future penalties, the South China Morning Post reported on Tuesday, citing people with knowledge of the matter. "It is vital that our colleagues in the House keep this bipartisan provision in the bill as it heads towards a conference".

The Senate approved a defense package with a provision that would reverse the ZTE agreement.

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Since trading resumed last week, ZTE has lost 38% of its market value or more than $7 billion, according to Asian press reports.

The U.S. Senate bill also calls for both sides to expand cooperation in the areas of humanitarian assistance and disaster relief and urges the secretary of defense to consider supporting a visit by an American hospital ship to Taiwan as part of the annual "Pacific Partnership" mission to improve disaster response planning and preparedness. The amendment to the defense spending bill forces the Commerce Department to reverse its reprieve on penalties imposed on ZTE for violating USA sanctions aimed at isolating Iran and North Korea, then lying about it.

The ban is now prohibiting ZTE to purchase components from USA manufacturers, including chipsets from San Diego-based Qualcomm.

It could face a hard path to being included in the final NDAA, especially if Trump lobbies the Republican-led Congress against it, as he is expected to do.

A spokesperson for Senator Tom Cotton of Arkansas, who was a sponsor of the amendment blocking out ZTE and Chinese telecommunications cohort Huawei, confirmed that the topic of ZTE was discussed, but did not specify any negotiation.