US Senate votes to ban ZTE

Taiwan military exercise

But they invariably agree on one thing-the United States should stay tough on China's tech giants.

The Senate approved the bill, 85-10, sending it to the House, which approved the measure last month without the ZTE provision. Commerce Secretary Wilbur Ross and Treasury Secretary Steven Mnuchin in recent weeks have tried to persuade lawmakers of the administration's approach to ZTE, but legislators said the deal failed to address their national-security concerns.

With around 30 percent of the components in ZTE products coming from U.S. businesses, including Qualcomm, Intel, and Microsoft, the ban led to it ceasing "major operating activities" one month later.

ZTE was first slapped with the seven-year ban back in April, after it was caught buying U.S. components, incorporating them into its equipment and illegally shipping them to Iran and North Korea.

On June 7, Wilbur Ross announced that the Trump administration had reached a deal that would save ZTE from collapsing.

In a joint statement, Republican Senators Marco Rubio and Tom Cotton, as well as Democrat Senators Chuck Schumer, Chris Van Hollen, said: "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".

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"This is the first time Congress has really stood up to him on a trade issue, and it's clear they are angry", said Bill Reinsch, a senior adviser at the Center for Strategic and International Studies in Washington.

"We've articulated our desire to better educate members about the ZTE action by Commerce, and we expect to address it in conference", White House legislative liaison Marc Short said last week."We think we can fix it in conference", Short added, referring to the process when differences in House and Senate bills are reconciled.

Since the Chinese vendor heavily relies on US-made Qualcomm chips for its equipment, the ban dealt a huge blow to ZTE's production line, and the vendor openly admitted it risked going under. Huawei has been under suspicion from USA lawmakers since 2012, when the House Intelligence Committee released a report arguing that the company poses a national security threat due to alleged ties with the Chinese state. None of the four companies responded immediately for comment.

Shares of ZTE Corp plummeted on Tuesday after the U.S. Senate's passage of a defense bill set up a potential battle with the White House over whether the Chinese telecoms firm can resume business with its U.S. suppliers.

Trump plans to meet with Republican lawmakers on Wednesday to persuade them to remove the ZTE language during the reconciliation phase.

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