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ZTE isn't safe yet: Trump will reportedly try to stop Senate bid to kill deal

A face-off with the president could be brewing.

CHINA-US-TELECOMMUNICATION-ZTE

Back in business. Or not.

Johannes Eisele/Getty Images

Senate Democrats and Republicans don't often work together. But they're joining forces to undo a deal that saves Chinese smartphone maker ZTE.

Senators plan to add a provision that would ban US suppliers from selling to ZTE to the National Defense Authorization Act, according to The Wall Street Journal. The annual defense policy bill is expected to pass the Senate later this week.

The amendment would also ban government agencies from trading telecommunications equipment and services with ZTE, as well as Shenzhen-based Huawei, according to The Hill. It would also prevent loans or subsidies to either company.

The Senate's move represents a rebuke of President Donald Trump's push to negotiate a settlement with ZTE, which went against an initial ban by the Commerce Department. Senators on both sides of the aisle criticized Trump for calling on the Commerce Department to reverse its position, with many saying ZTE poses a risk to US national security.

Assuming the Senate passes the bill, it will next head to a conference committee with the House where any differences between the two bills will be sorted out. However, the Journal reported on Wednesday that the White House will try to change or remove the language while the bill is in the committee. If the amendment survives, it could prompt a face-off with Trump, who has to sign the bill. 

Neither the White House nor ZTE immediately responded to requests for comment.

The Senate didn't drag its feet in seeking to undo the Trump administration's deal with ZTE. Struck last Thursday, the deal allows the company to continue buying components from the US under supervision, as well as requiring payment of a $1 billion fine.

The Commerce Department ban arose from a controversy in which ZTE failed to punish employees who were involved in illegally shipping US equipment to Iran and North Korea.

It's unclear how a showdown would play out, but ZTE said Tuesday that its shares will resume trading on Wednesday, ending a two-month suspension.

First published, June 12, 10:20 a.m. PT.
Update, June 13 at 9:28 a.m.: Adds that the White House will reportedly attempt to stop the amendment while the bill is in a conference committee.

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