Jun 13, 2018

White House eyes ZTE bargain after Senate vote

ZTE sign on side of building

Photo: Zhang Peng/Getty Images

The Wall Street Journal reports President Trump has not given up on his $1.4 billion deal to save the Chinese telecom manufacturer ZTE, despite the Senate 's move to nix any deal by adding the provision to a must-sign defense bill.

The counter move: The Journal cites a White House official who says the administration will try to get the ZTE language softened when the House and Senate compromise on a final version of the National Defense Authorization Act.

Why it matters: The deal is make or break for ZTE, which will otherwise no longer be allowed to import American components. ZTE has ceased production without access to U.S. parts — particularly microprocessors with no clear Chinese replacement.

  • Lawmakers have several problems with the deal. ZTE has been punished twice for selling banned technology to North Korea and Iran in about a year. After the first infraction, ZTE agreed that, if it was ever caught again, it would face the ban on U.S. tech.
  • Senators from both parties argue that the deal encourages firms to violate embargoes to hostile nations, because the U.S. won't appear to have the will to respond.
  • There are separate concerns on Capitol Hill that ZTE intentionally sabotages its wares to bolster Chinese espionage efforts.
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