Senators strike deal to include ZTE penalties in must-pass defense bill

Senators announced Monday that legislation keeping in place penalties against Chinese telecommunications giant ZTE will be included in a must-pass defense policy bill.

“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 Charles Schumer (D-N.Y.), a supporter of the amendment, said in a statement. 

The amendment keeping in place penalties against ZTE is expected to be added to the National Defense Authorization Act (NDAA), an annual defense policy bill that the Senate is poised to pass as soon as this week. 

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The amendment would also ban government agencies from buying or leasing telecommunications equipment and services from Chinese telecom firms Huawei and ZTE and ban the government from providing loans to or subsidizing either company.

The provision still needs to survive a conference with the House, which passed its own defense bill. If it’s in the final bill it could provoke a showdown with President Trump, who needs to sign the must-pass defense policy bill. 

The Trump administration announced late last week that it had reached a deal to lift penalties against the company in exchange for ZTE paying a $1 billion fine and embedding a U.S.-selected compliance team in the firm. 

But talk of a deal to save ZTE has sparked bipartisan backlash on Capitol Hill, where lawmakers have been frustrated with the administration’s efforts. 

Schumer said earlier on Monday that the agreement was as “weak as a wet noodle” and argued the administration had been “outmaneuvered” in the agreement.

Schumer, as well as Sens. Chris Van Hollen (D-Md.), Tom Cotton (R-Ark.) and Marco Rubio (R-Fla.), filed the amendment last week to the NDAA to restore the Commerce Department’s penalties on ZTE for violating U.S. sanctions against Iran and North Korea.

“ZTE has repeatedly violated U.S. law and represents a threat to our national security – Congress cannot and will not allow the Administration to let ZTE off the hook in the interest of Chinese jobs,” Van Hollen said in a statement.

“The threat Huawei and ZTE pose to our national security is too great to ignore. This amendment will help keep Americans’ private information out of the hands of the Chinese Communist Party, and I’m pleased it will be included in the NDAA,” Cotton added.

Senators have been privately discussing adding the bipartisan proposal into the NDAA. 

Rubio told reporters earlier on Monday that he expected it to be included, while GOP Sen. John Cornyn (Texas) cautioned that talks were ongoing but no final decision had been made. 

Commerce Secretary Wilbur Ross is meeting with senators on Monday evening to walk them through the details of the agreement.