The saga of ZTE is a never-ending roller coaster. After violating sanctions in Iran, ZTE was banned from buying parts and components from all American companies. And then suddenly it wasn’t, after President Trump and the Department of Commerce inked a deal that gave ZTE another lease on life. But now, it seems the ban could be back on.
Under the terms of the DoC’s previous deal, ZTE would have been forced to pay an additional $1 billion in fines (on top of the $900 million it already paid) and place another $400 million in escrow to cover potential future penalties. But thanks a new bipartisan amendment to the upcoming “must-pass” National Defense Authorization Act, it seems ZTE’s one remaining lifeline would disappear by retroactively reinstating the original seven-year ban.
In a statement to reporters, amendment co-sponsor Sen. Tom Cotton (R) said “ZTE said they couldn’t remain in business, or at least not remain anything other than a cell phone hand-held business, if the denial order from March was in effect. And this would essentially put the denial order back into effect.”
The fear among U.S. intelligence agencies is that Chinese telecom equipment makers such as ZTE and Huawei pose a threat to national security, with even leaders of organizations including the NSA and FBI concerned that ZTE and Huawei could be using their devices and equipment to spy on Americans.
By shoehorning an amendment into the National Defense Authorization Act, the senate has made it much more difficult for President Trump to undo or remove ZTE’s ban. This puts the ball back in Trump’s hands, who despite his campaign rhetoric about how Chinese workers have been stealing jobs from Americans, seemed quite proud to tweet out that he was working on a deal with Chinese President Xi Jinping to get ZTE “back into business, fast.”