ZTE will continue to be able to use U.S.-made technology after congressional leaders abandoned an effort to reinstate a Commerce Department ban on the practice.
The Washington Post reports that a compromise version of a must-pass defense bill would not include Senate language that would have restored the department’s “denial of export privileges” order — which prohibited the Chinese tech giant from using U.S. components in its devices.
The agency imposed the seven-year ban after finding that ZTE rewarded employees it was supposed to discipline for violations of sanctions against Iran and North Korea. The move forced ZTE to shut down its operations, but amid rising trade tensions between the U.S. and China, President Donald Trump made an unusual vow to resolve the matter and keep the company in business.
The settlement ultimately handed down by the White House required ZTE to pay a $1 billion fine, replace its executives and bring on U.S.-backed compliance officials in exchange for access to the U.S. market.
The Senate version of the defense bill would have nixed that deal, but the House language only barred ZTE from doing business with U.S. government agencies and contractors.
Lawmakers said late last week, according to the Post, that the final bill would include the House language as part of a deal to expand the authority of the Committee on Foreign Investment in the United States, particularly with regard to Chinese companies.
Chinese telecom companies, in particular, ran afoul of U.S. national security and intelligence officials in recent years due to their ties to Beijing and potential capacity for espionage.
Senate Minority Leader Chuck Schumer, however, nonetheless criticized the move for hurting both U.S. workers and national security interests.
“President Trump has once again broken his core promise to be tough on China simply to please the president of China — and he got nothing in return,” Schumer, D-N.Y., said in a statement.
Filed Under: Industry regulations