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Illustration: Lazaro Gamio/Axios

China's ZTE is alive, escaping what once looked like a death sentence for repeatedly violating U.S. sanctions and being seen as a threat to national security.

The details: The deal requires a $1 billion fine for ZTE, plus $400 million in escrow to cover any future violations. ZTE will also have to "retain a team of special compliance coordinators" who answer to the U.S., and change its top leadership.

The big picture: Trump's broad tariffs against Chinese goods concern Beijing, but the Commerce Department going after ZTE — a state-owned enterprise in a strategic sector — hit a sore spot for the Communist Party.

  • P.S. "[ZTE's] fate has gotten caught up in a bigger web, including an upcoming summit between President Trump and North Korea’s leader and the success of an American telecom company, Qualcomm, which sells a large amount of semiconductors to ZTE and is awaiting Chinese approval of a deal to acquire a Dutch telecom firm that will help it build the next generation of wireless technology, known as 5G." [N.Y. Times]

Why it matters: China's successful negotiation to save the company could embolden it to try the same for Huawei.

  • Huawei has been banned from military bases due to national security concerns about espionage. It's back in the headlines this week after it was revealed Huawei accessed Americans' data via Facebook. [Go deeper on Huawei]

What they're saying:

  • Marco Rubio: "I assure you with 100% confidence that #ZTE is a much greater national security threat than steel from Argentina or Europe."
  • Chuck Schumer: "@realDonaldTrump should be aiming his trade fire at China, but instead he inexplicably aims it at allies like Canada, Mexico and Europe."
  • Sen. John Kennedy: "I’m sure ZTE makes a fine cell phone, but they’re a little too close to the Communist Party of China for my tastes."
  • Go deeper: The bipartisan blowback

What's next: A bipartisan hoard of senators have introduced legislationto reverse the ZTE deal.

Be smart: China has the leverage to take on the U.S., and it's smart enough to use it when it matters — as was the case with ZTE.

Subscribe to Axios AM/PM for a daily rundown of what's new and why it matters, directly from Mike Allen.
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Biden Cabinet confirmation schedule: When to watch hearings

Joe Biden and Kamala Harris on Jan. 16 in Wilmington, Delaware. Photo: Angela Weiss/AFP via Getty Images

The first hearings for President-elect Joe Biden's Cabinet nominations begin on Tuesday, with testimony from his picks to lead the departments of State, Homeland and Defense.

Why it matters: It's been a slow start for a process that usually takes place days or weeks earlier for incoming presidents. The first slate of nominees will appear on Tuesday before a Republican-controlled Senate, but that will change once the new Democratic senators-elect from Georgia are sworn in.

Kamala Harris resigns from Senate seat ahead of inauguration

Vice President-elect Kamala Harris. Photo: Mason Trinca/Getty Images

Vice President-elect Kamala Harris submitted her resignation from her seat in the U.S. Senate on Monday, two days before she will be sworn into her new role.

What's next: California Gov. Gavin Newsom has selected California Secretary of State Alex Padilla to serve out the rest of Harris' term, which ends in 2022.