Senate shuts down White House effort to revive ZTE

Remigio Civitarese
Giugno 19, 2018

The Senate voted late Monday afternoon 85-10 to block the Trump administration from lifting the "death penalty" imposed on ZTE, a Chinese cell phone giant with its US headquarters near Dallas.

The company has been on life support since Washington said it had banned U.S. companies from selling crucial hardware and software components to ZTE for seven years.

The Senate voted 85-10 for the annual National Defense Authorization Act, throwing the state-backed company back into the center of a bilateral trade spat and reigniting uncertainty over the outlook for its crucial supply chain.

U.S. officials imposed the ban because of what they said were false statements by the firm over actions it claimed to have taken regarding the illegal sale of goods to Iran and North Korea. It also bans government agencies from buying or leasing equipment from ZTE and another major Chinese firm, Huawei.

ZTE's Hong Kong-listed shares tumbled as much as 24 percent to HK$10.02, its lowest in almost two years, while its Shenzhen shares fell by their daily limit of 10 percent. The company has lost around 60 percent of its value since it resumed trading last week after a two-month suspension that followed the initial ban.

However, the bill - which provides $716 billion in funding for national defense for fiscal year 2019 and gives policy guidance to the Pentagon - is not a done deal.

The Senate version of the bill will now be sent to committee, where senators will resolve differences between it and the House version passed in May.

"It is vital that our colleagues in the House keep this bipartisan provision in the bill as it heads towards a conference", Schumer and Rubio said.

U.S. President Donald Trump takes part in a welcoming ceremony with China's President Xi Jinping on November 9, 2017 in Beijing, China. "There will be a lot of congressional resistance to weakening the ZTE amendment, but I would not be surprised to see a compromise".

Its fiberoptic networks depend on U.S. components and its cheap smartphones sold en masse overseas are powered by USA chips and the Android operating system.

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