Senate leaders agreedMondayto include language in the annual defense spending bill that would reverse the Trump administration’s decision to save Chinese telecommunications company ZTE after it was caught violating the terms of a 2017 penalty agreement by making illegal sales to Iran and North Korea.
The move is a rebuke to President Donald Trump on the eve on his summit meeting with North Korean leader Kim Jong Un, after Trump had pledged to China’s leader that he would try to save the state-controlled company from a crippling sanction. The language will be part of an amendment in the 2019 National Defense Authorization Act, a $716 billion defense policy bill, H.R. 5515 (115).
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“By including this provision to undo the ZTE deal in the defense bill, the Senate is saying loudly and in a bipartisan fashion that the president is dead wrong to back off on ZTE,” Senate 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.”
“Great news! Our bipartisan amendment restoring penalties on #ZTE is included in the #NDAA bill the Senate will be advancing to later this evening,” Sen. Marco Rubio (R-Fla.) added on Twitter.
The action came just days after Commerce Secretary Wilbur Ross announced that the administration had reached a deal with ZTE that would allow it continue to operate. Ross met with the senators late Monday afternoon to brief them on the new settlement.
In April, Ross had initially imposed a seven-year ban on the company from doing business with American firms after it was caught violating the terms of its 2017 penalty agreement. However, at the request of Chinese President Xi Jinping, who feared the original penalty would put ZTE out of business, Trump directed Ross to come up with another option.
That came last week, when Ross announced ZTE had agreed to pay an additional $1 billion fine, change its management team and add a new team of sanctions compliance officers chosen by the United States in exchange for the ban being lifted. Ross also said the Trump administration had not received any commitments from China in return.
“I and obviously every other senator believes the death penalty is the appropriate punishment for their behavior,” Sen. Tom Cotton (R-Ark.) told reporters after Ross briefed senators on the department’s latest ZTE action. “They’re a repeat bad actor that should be put out of business. For eight years, ZTE was able to run wild and be able to become the fourth-largest telecom company in the world.”
If the Senate amendment becomes law, “I would expect there wouldn’t be a ZTE,” Cotton added.
Ross did not try to talk senators out of the amendment nor did he seem displeased during Monday’s classified briefing, Cotton said.
The Arkansas Republican added that he did not believe Trump would veto the legislation because of its many other priorities. The ZTE provision is part of a broader package of “manager’s amendments” that will be added to the defense deal at the start of debate.
“I’ll be voting for the amendment,” Sen. John Cornyn, the No. 2 Republican, told reporters after the briefing. “It really is based out of the concerns that China is using communications companies as a means to conduct espionage.”
Not every lawmaker emerging from the briefing came away committed to Cotton’s amendment.
Sen. Ron Johnson (R-Wis.), who chairs the Homeland Security and Governmental Affairs Committee, declined to say whether he would support the language. “One side of the equation,” Johnson said of the briefing. “We need more information from the intelligence community.”
But Sen. John Thune, the No. 3 Republican in the chamber, described his colleagues as “being very cautious” on how they approach ZTE and that including the amendment in the manager’s package reflects confidence in its congressional backing.
“I suspect there was enough support for what they’re trying to do here,” Thune said.
On Monday, the Senate overwhelmingly voted to formally start debate on its version of the fiscal 2019 National Defense Authorization Act after several early setbacks.
The House has already finished work on its version and the two bodies will have to work out any differences before sending the final package to Trump for his signature.
If the Senate amendment becomes law, it would automatically reinstate the seven-year prohibition until Trump has certified to Congress that ZTE has met certain conditions. It also would ban all U.S. government agencies from purchasing or leasing telecommunications equipment and/or services from ZTE, a second Chinese telecommunications firm, Huawei, or any subsidiaries or affiliates of those two companies.
The amendment language “prohibits the federal government from doing business with ZTE or Huawei or other Chinese telecom companies” and puts the company back on the sanctions list and “holds ZTE accountable for violating their previous commitment,” Cotton said.
Connor O’Brien contributed to this report.