Senators on both sides of the aisle introduced legislation that would block the deal.
ZTE halted most of its operations in May after the Trump administration blocked U.S. firms from selling or providing services to the telecom giant, but U.S. Commerce Secretary Wilbur Ross said last week that the company and the United States had reached a deal after Trump pledged to help the company get back into business. The ban would essentially cripple ZTE to the point of potential bankruptcy.
Then, if the ZTE rollback is still in, it will become a major challenge to Mr. Trump, who personally stepped in as a favor to Chinese President Xi Jinping.
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 USA law enforcement monitoring the company's actions. It would hurt ZTE for sure, but keep the company in business.
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. The order forced ZTE to effectively.
ZTE is back in business: What now?
The ban that brought the Chinese vendor to its knees was reversed by U.S. president Donald Trump as a favour to Chinese president Xi Jinping. It's a stunning turnaround, though it had been signalled for some weeks.
They were even more surprised that the leniency came on ZTE.
The deal implemented a $1 billion penalty against ZTE and required the addition of a US -chosen compliance team to monitor the company. However, it wouldn't be the first time the President chose the unexpected route.
As part of the settlement deal, ZTE will also employ a special compliance coordinator (SCC) and a team of assistants at its expense for a period of 10 years.
The bipartisan anti-ZTE amendment was co-authored by Republican Tom Cotton, and Democrat Chris Van Hollen. Although $1.4 billion is not a small amount of money, it sets the stage for other companies to also violate trade laws under the assumption that, at worst, they'll have to pay a hefty fine.
Investors wiped about $3 billion off embattled Chinese telecommunications giant ZTE Corp's (0763.HK) (000063.SZ) market value as it resumed trade on Wednesday after agreeing to pay up to $1.4 billion in penalties to the US government. Senator John Cornyn (R-TX) said, "China is using its telecommunications companies as means to conduct espionage. For me, it was more than that".
Senate Majority Leader Mitch McConnell (R., Ky.) said that passing the defense measure is at the top of his to-do list this week.