Senate blocks ZTE deal in rebuke of Trump deal

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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.

In a statement to reporters, amendment co-sponsor Sen.

USA lawmakers have attacked Washington's agreement with ZTE and plan legislation to roll it back, citing intelligence warnings that ZTE poses a national security threat.

The telecom company is considered by the intelligence community to be a mechanism for espionage by, in part, selling phones in the US that can be tracked and enabled to steal intellectual property. According to the Wall Street Journal, a group of GOP Senators has added an amendment to the National Defense Authorization Act that would make it against the law for ZTE to obtain supplies from USA companies.

The Senate amendment passed despite late Monday-night lobbying from Commerce Secretary Wilbur Ross, according to The Wall Street Journal.

However, in May the president tweeted that he was working with China to keep ZTE running and hoped a deal would prevent "too many jobs in China" from being lost.

But the bipartisan senate amendment, which has been added to the must-pass National Defense Authorization Act, would essentially kill that agreement by retroactively reinstating financial penalties and continuing the prohibition on ZTE's ability to sell to the USA government.

ZTE, China's second-largest maker of telecoms equipment, agreed to replace its top executives and board of directors and to install a team of USA compliance experts.

ZTE cellphones in their packaging.

The ban, which has prevented ZTE from buying the USA 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 United States -approved bank. Tom Cotton (R) said "ZTE said they couldn't remain in business, or at least not remain anything other than a cell phone hand-held business, if the denial order from March was in effect".

Visitors pass in front of the Chinese telecom giant ZTE booth February 26 at the Mobile World Congress in Barcelona.

Florida Republican Sen. Marco Rubio added that the amendment was "Great news!" The move by senators on Monday to include it in the annual must-pass defense bill came just hours before Trump meets with North Korean leader Kim Jong Un.

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