As Trump Lifts Sanctions on ZTE, Senate Restores Sanctions in a Defense Bill


On Friday, the US lifted sanctions on ZTE. But in an 85-10 vote, the Senate restored those sanctions in a defense bill.

The fate of Chinese telecom giant ZTE is still unsettled even though Commerce Lifts Ban on U.S. Suppliers Selling to ZTE.

ZTE Corp. can resume business with its U.S. suppliers, the Commerce Department said Friday, after the Chinese telecommunications giant met the conditions of a deal President Donald Trump made to save the company.

The Commerce Department struck a new deal with ZTE on June 7 that required the Chinese firm to put $400 million into an escrow account, pay a $1 billion fine, replace its board of directors and senior leadership, and fund a team of U.S. compliance officers to monitor the company for 10 years.

That seems like an excellent deal to me but the Senate disagrees.

A measure to reinstate the prohibition on allowing ZTE to buy from U.S. suppliers, pushed by Sens. Tom Cotton (R., Ark.), Marco Rubio (R., Fla.), Chuck Schumer (D., N.Y.) and Chris Van Hollen (D., Md.), was wrapped into a larger, must-pass defense bill that cleared the Senate in June on an 85-10 vote.

That's more than enough to an override a Trump veto. But it's possible it does not go that far. A house bill does not have sanction language so the competing defense bills will head into reconciliation.

The Commerce Department defended the ZTE deal in its Friday statement, saying the settlement provided for the “strictest compliance measures ever imposed in such a case.” It added: “The unprecedented access afforded the compliance team by this agreement vastly improves the speed with which the Department of Commerce can detect and deal with any violations.”

I strongly side with Trump on this one. Remove the sanctions and move on.

To do otherwise needlessly harms US businesses and disrupts global supply chains with damaging consequences.

Mike "Mish" Shedlock

Comments (4)
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"To do otherwise needlessly harms US businesses and disrupts global supply chains with damaging consequences."

Thereby providing opportunity for non-criminal players to enter the market.


It is time for another Constitutional Amendment – this time replacing directly elected Senators with a form of extended jury service: randomly selected citizens from each State go for a once-in-a-lifetime 6 year term with no pension benefits and a follow-up forensic accounting to make sure that they don’t succumb to the Harry Reid (D-NV) disease – enter the Senate a poor man and leave extremely wealthy.

David Goldman in the March 2018 edition of Imprimis asserted that the US Air Force cannot put a plane into the air without using Chinese computer chips. None of us ever wants to see a shooting war with China – but foreign sourcing of key military technologies seems like a really dumb idea. If only we had Senators who cared about things like that – and jobs for US workers -- instead of posturing for the little-watched news channels.


You forgot to mention the most important part of the deal to ease sanctions: China's $500,000,000 investment in Trumps Indonesian Project.

  1. Randomly chosen senators will NOT make things any better, as these people will (in quite a few cases) have NO interest (or ability) in the job . . . . go from there an see were that leads you, you really want to 'hire' someone to run the country like that. - And I will admit that I don't have a 'better' solution, the problem is that the kind of person who would be ideal for this job doesn't want it ... and even if he/she wanted it getting him/her elected would be a long shot.
  2. That's what 'global supply chain' means, it's no longer the case that ANY country can ramp up military production significantly after a major war starts (like the US did in WWII). You go to war with the equipment you have . . . and once it 'wears out' that's pretty much it ... and if that happens before it happens to your opponent (regardless of the quality of his stuff) you loose . . . . . . . N.B. And another tidbit, during WWII they built planes in weeks . . . think any modern piece of major military equipment can be built in 'weeks' ... the war will be over one way or another before you can ramp up production anyway making that shipment of chips from wherever irrelevant.

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