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Senate votes to reinstate penalties against Chinese telecom ZTE

Vote sets the stage for a fight with the White House.

Senate approves provision that would undo Trump administration efforts to keep ZTE doing business with US suppliers.
Johannes Eisele / AFP/Getty Images

The US Senate voted Monday to reinstate tough penalties against ZTE, rejecting President Donald Trump's efforts to allow the Chinese telecom giant to resume business with US suppliers.

The measure, part of a military spending bill called the National Defense Authorization Act, was passed by the Senate by a vote of 85 to 10. The provision undoes a deal the US Commerce Department struck earlier this month for ZTE to pay a $1 billion penalty to the US, setting the stage for a fight with the White House.

ZTE, the fourth-largest smartphone maker in the US, has been dealing with a Commerce Department denial order that prevents American businesses from selling hardware or services to the company. The seven-year ban forced ZTE to shut down its "major operating activities." The ban followed the government's determination that ZTE violated terms of a 2017 settlement by failing to fire employees involved with illegally shipping US equipment to Iran and North Korea.

The ban crippled the company, which shut down major operations and left it unlikely to survive -- until Trump got involved. He tweeted that he wanted the Commerce Department to work with ZTE on getting the ban lifted.

ZTE has become a critical part of the broader discussions between China and the US, the two largest economies in the world, over trade tensions and whether the two countries can prevent a trade war that could involve billions of dollars' worth of tariffs.

Before the bill can become law, it must first be reconciled with one already passed by the House of Representatives that doesn't include the ZTE provision and then signed by Trump.

ZTE didn't immediately respond to a request for comment.

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