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ZTE in jeopardy again as Senate defies Trump with potential new ban

ZTE in jeopardy again as Senate defies Trump with potential new ban

The move enraged Republicans and Democrats who said ZTE not only worked with Iran and North Korea in violation of USA sanctions, but is a threat to national security, offering Chinese intelligence operatives a way to spy on the US through ZTE products.

The Senate plans to challenge President Trump's pledge to lift certain restrictions against Chinese telecom giant ZTE by including a measure in the annual defense bill that would effectively block the deal from being implemented.

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.

In its statement late Tuesday, ZTE said it will "assess the full impact" of the ban and the new deal with the USA government and disclose it in an update earnings release.

ZTE Corp's (000063.SZ) settlement with the U.S. Commerce Department that would allow China's No. 2 telecommunications equipment maker to resume business with U.S. suppliers was made public on Monday, days after the company agreed to pay a $1 billion fine, overhaul its leadership and meet other conditions.

Since the language is tucked into a larger defense bill, Trump would have no choice but to pass it.

He said the speed of the pushback, and the striking bipartisan coalition - chief sponsors include Sen. Tom Cotton, R-Ark., said.

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The authorization must pass both houses of Congress.

But Trump then announced in mid-May that he was working with Chinese President Xi Jinping to find a way to get ZTE back into business.

ZTE (0763.HK) did not immediately respond to requests for comment on Monday. The Chinese smartphone and network equipment maker had been caught selling goods and services to North Korea and Iran, violating US sanctions.

Lifting the ban under Trump's deal would result in ZTE still buying from U.S. suppliers, but paying massive fines upwards of $1 billion with United States law enforcement monitoring the company's actions.

They were even more surprised that the leniency came on ZTE. Marco Rubio, Florida Republican and a co-sponsor of the legislation. The Commerce Department placed additional sanctions on the company after it failed to follow through with its reorganization plan and lied to the US government about it.

The measure is being included as part of a package of changes agreed upon by committee leaders, meaning that the Senate is likely to include it as part of the defense bill later this week.