US Senate says "No"

Trump's ZTE deal is about to fail

19. Juni 2018, 14:44 Uhr   |  Frank Riemenschneider

Trump's ZTE deal is about to fail

ZTE will sich mit allen Mitteln gegen den Verkaufsstopp wehren, den die US-Bhörden verhängt haben. Das Untenremen erwäge laut Berichten aus Asien aber auch den Verkauf der Smartphone-Einheit.

The US Senate has confirmed by a large majority under the National Defense Authorization Act the boycott of the Chinese telco group ZTE by US companies, whose share price then plummeted again.

The US Senate has voted to reintroduce a ban preventing the Chinese telecommunications company ZTE from buying US components and using US software. The next step in the legislative process must now be a vote with the House of Representatives and President Trump's final document must be signed.

ZTE was banned from trading by the US Department of Commerce in April after failing to pay a fine for breaching sanctions against Iran and North Korea. This ban has effectively withdrawn ZTE, which depends on US components such as Qualcomm Snapdragon SoCs. Shortly thereafter, Trump said he would make a deal to revive the company and an agreement was actually reached in early June. Among other things, it includes a $1 billion fine, the exchange of ZTE management and a US watchdog for the implementation of the agreed measures.

Senators of both parties immediately threatened to stop the agreement and reintroduce the ban and called ZTE a national security risk. Finally, a cross-party group worked to introduce legislation on this issue.

In a joint statement after the Senate decision, Senators Marco Rubio (Republican), Chuck Schumer (Democrat), Chris Van Hollen (Democrat) and Tom Cotton (Republican) said: "We are encouraged that both parties have made it clear that the protection of American jobs and national security must come first when doing business with countries like China, which in the past has shown little consideration for both. It is important that our colleagues in this House retain this bipartisan provision in the bill".

The Senate voted 85 to 10 in favour of reintroducing the ban. It was incorporated as a supplement to the National Defense Authorization Act (see appendix for original text), a law that has already passed through the House of Representatives. Although this does not include a ZTE delivery ban, both laws would at least prevent the US government from using equipment from ZTE or Huawei - another Chinese telecom company often referred to by the US government as a security risk - or from cooperating with companies that use them.

It is not clear how the ZTE supply ban will survive the passage through the House of Representatives or whether it will be weakened after the two proposals have been reconciled. If it remains as decided in the Senate, the legislation could also be vetoed by Trump - however, the bill has at least a 2/3 majority in the Senate that overrides the veto. In a similar case involving sanctions against Russia, Trump then decided to sign the law despite his declared dissatisfaction.

The so called "National Defense Authorization Act".

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