Congress Moving To Block Trump Deal With ZTE Over Iran Sanctions Violations

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Congress Moving To Block Trump Deal With ZTE Over Iran Sanctions Violations

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 U.S. national security.

Commerce Secretary Wilbur Ross was on Capitol Hill on Monday evening to speak with senators behind closed doors about the details of the ZTE deal, in a meeting that began shortly after the decision to include the amendment blocking the president's deal was announced.

The ban, which has prevented ZTE from buying the US components it relies on to make smartphones and other devices, will not be lifted until ZTE pays a fine and places $400 million more in an escrow account in a USA -approved bank.

The Senate appears poised to take the first major step to rein in President Trump's trade policies, after senators struck a deal Monday on a measure that would block his plans for dealing with Chinese telecom firm ZTE.

Trump's ZTE deal that would save the company may not happen after all. Tom Cotton of Arkansas, a conservative Republican, and Sen.

ZTE, the fourth largest smartphone vendor in the USA, has been in the news nearly daily since the Commerce Department lifted a stay it placed on a US export ban against the firm.

Senators plan to add a provision in the National Defense Authorization Act (NDAA), an annual defense policy bill they're expecting to pass this week, that will ban U.S. suppliers from selling to ZTE, reported The Wall Street Journal.

"If this was just a violation of sanctions, then the penalty is fine, but for me it's more than that", said Sen.

Florida Republican Sen. Marco Rubio added that the amendment was "Great news!"

"The Senate is saying loudly and in a bipartisan fashion that the president is dead wrong to back off on ZTE", said Minority Leader Charles E. Schumer, New York Democrat.

As part of its deal with the Commerce Department, signed June 8, ZTE must replace the boards of directors of two corporate entities within 30 days.

All members of its leadership at or above the senior vice president level would be removed within the 30-day period, with a commitment that they would not be re-hired, along with any executives or officers tied to the wrongdoing, it said. Meanwhile, there's no guarantee USA lawmakers won't come back with further sanctions.

They were even more surprised that the leniency came on ZTE. "We'll see if it does" get through Congress, Ross said in an interview in Washington on Tuesday.

"ZTE should have a significant loss in FY18E due to the penalty in addition to near-term operational challenges due to management change and increased overseas growth uncertainties", Citi analyst Bin Liu wrote.

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