(Bloomberg) -- The U.S. Senate plans to advance legislation to restore penalties on ZTE Corp (HK:0763)., after President Donald Trump drew sharp criticism for easing restrictions to get the Chinese company back in business.
The Senate is voting late Monday to start debate on the defense authorization bill for fiscal 2019, and Senators said the ZTE measure has been included.
“Great news! Our bipartisan amendment restoring penalties on #ZTE is included in the #NDAA bill the Senate will be advancing to later this evening,” Rubio said in a Twitter post.
Senator Marco 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.
Commerce Secretary Wilbur Ross last week announced the U.S. reached a deal with ZTE that includes a record fine, changes to the company’s board and management and U.S. compliance officers.
The U.S. blocked ZTE’s access to U.S. suppliers in April, saying the company violated a 2017 sanctions settlement related to trading with Iran and North Korea and then lied about the violations. The telecommunications company announced it was shutting down just weeks after the ban was announced.
Broad Deal
Trump has said he reviewed the penalties as a personal favor to Chinese President Xi Jinping. Lifting the sales ban on ZTE was a key demand China made in the broader trade talks with the U.S. to avert a trade war between the world’s two-largest economies.
The deal has sparked bipartisan pushback, with many lawmakers citing national security as their main concern.
White House trade adviser Peter Navarro on Sunday likened the deal to “three strikes you’re out,” referring to two prior violations ZTE committed under the sanctions agreement with the U.S.
Ross was planning to brief senators on the ZTE deal Monday, Senate Majority Whip John Cornyn said.
Van Hollen said the move is a very good sign for stopping the ZTE deal. “What you are seeing is a bipartisan reaction against letting ZTE off the hook” he said.
The quick action to stop Trump from rolling back the ZTE penalties shows the seriousness of the issue, Senator Minority Leader Chuck Schumer said in a statement.
“The fact that a bipartisan group of senators came together this quickly is a testament to how bad the Trump administration’s ZTE deal is and how we will not shy away from holding the president’s feet to the fire when it comes to keeping his promise to be tough on China,” Schumer said.