US Senate rejects Trump's deal to lift ban on Chinese tech giant ZTE after intelligence warnings

Thomas Peter-Pool/Getty ImagesU.S. President Donald Trump takes part in a welcoming ceremony with China’s President Xi Jinping on November 9, 2017 in Beijing, China.
  • The US Senate has disavowed President Donald Trump’s deal to lift sanctions on Chinese tech giant ZTE.
  • The Trump administration had reached a deal to no longer prevent US companies from trading with ZTE, in exchange for a $US1 billion fine.
  • But the Republican-controlled Senate voted 85-10 to pass a defence spending bill that would also overrule the ZTE deal. The amendment could be removed as the bill is reconciled with a House version.
  • Numerous Republican and Democratic senators said their vote related to national security issues after numerous intelligence warnings about ZTE this year.

The US senate has voted to reinstate a ban on China’s ZTE, despite President Donald Trump’s attempts to lift sanctions on the telecommunications company.

ZTE essentially shutdown operations in May after it was banned from importing US components for seven years for misleading regulators about violating sanctions on North Korea and Iran. But, on Trump’s orders, fewer than two weeks ago the administration made a deal to end ZTE’s sanctions in exchange for a $US1 billion fine, a move that was originally part of a larger trade deal that was unpopular with both Republicans and Democrats.

On Monday night, the Senate tried to take control of the situation by passing the annual National Defence Authorization Act, which included an amendment to stop Trump’s deal allowing US companies to trade with ZTE. The legislation, which is considered crucial for continuing defence funding, was passed with 85-10 votes, one of a handful of times the Republican-controlled Senate has deviated from a Trump policy.

But the amendment is not guaranteed to become law. The bill will now need to be reconciled with a House version – where the amendment could be stripped out – voted through both the House and the Senate, and signed into law by Trump.

National security concerns appear to have been a crucial factor with US Senators Marco Rubio, Tom Cotton, Chuck Schumer, and Chris Van Hollen releasing a joint bipartisan statement.

“We’re heartened that both parties made it clear that protecting American jobs and national security must come first when making deals with countries like China, which has a history of having little regard for either,” they said.

Senate Intelligence Committee Vice Chairman Mark Warner also tweeted that the Senate had “blocked” the Trump administration from making a “bad deal with ZTE.”

“If the President won’t act on warnings from his own top intelligence officials about the dangers posed by ZTE, we will,” Warner said.

Earlier this year six intelligence chiefs – including the heads of the CIA, FBI, and NSA – testified they do not use, and would not recommend private citizens use products from ZTE or China’s Huawei. And the Pentagon announced in early May that it had stopped selling Huawei and ZTE phones and modems in stores on its military bases because they “may pose an unacceptable risk.”

And last month FBI Director Christopher Wray told a Senate hearing that the agency is “deeply concerned” about companies like ZTE.

“We the FBI remain deeply concerned that any company beholden to foreign governments that don’t share our values are not companies that we want to be gaining positions of power inside our telecommunications network that gives them the capacity to maliciously modify or steal information, that gives them the capacity to conduct undetected espionage, that gives them the ability to exert pressure or control,” Wray said when asked about the risks of giving ZTE more access to the US market.

There have also been allegations in recent months that ZTE was established for the very purpose of spying on other countries.

Despite these concerns, after ZTE was hit with sanctions, Trump ordered the Commerce Department to lift the ban and help ZTE “get back into business, fast.” The timing raised questions as three days earlier the Chinese government agreed to provide $US500 million in loans to an Indonesian theme park that the Trump Organisation has a deal to licence President Donald Trump’s name to.

NOW WATCH: Briefing videos

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.