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White House to block Congress from stopping ZTE deal

White House to block Congress from stopping ZTE deal

In return, the White House rescinded a seven-year ban on purchases of USA components that had forced ZTE to suspend most operations.

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 terms of that deal stipulate that the company has to install a whole new set of directors, embed a US-chosen compliance department and pay a $1 billion penalty.

The ZTE settlement came days after Beijing reportedly offered to boost purchases of American goods by $70 billion in order to fight a trade imbalance with the United States, while US President Trump has demanded a $200 billion reduction in its trade deficit with China over two years.

Acacia Communications Inc's supply agreement with ZTE Corp will remain suspended until the U.S. Department of Commerce implements its recent settlement with the Chinese firm, the U.S. company said on Tuesday.

An amendment sponsored by Sens. The Senate voted 91-4 late Monday to begin debate on the National Defense Authorization Act, including an amendment that will keep restrictions on ZTE.

Rubio, a Republican from Florida, is co-sponsor of the amendment, with Senators Chris Van Hollen, a Democrat from Maryland, and Tom Cotton, a Republican from Arkansas.

Visitors pass in front of the Chinese telecom giant ZTE booth February 26 at the Mobile World Congress in Barcelona.

President Donald Trump, however, swooped in to save ZTE after negotiating with the Chinese government.

The White House didn't respond Monday evening to a request for comment on the Senate's pushback.

The Senate's move comes less than a week after the administration struck an agreement with ZTE that would have kept the telecom company engaged in the US market. Senator John Cornyn (R-TX) said, "China is using its telecommunications companies as means to conduct espionage". Marco Rubio (R-Fla.), another chief backer of the amendment.

The ZTE leniency also rubbed senators wrong since it came about the same time the president slapped tariffs on steel and aluminum imports from US allies including Canada and the European Union.

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.

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