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Senate Committee Overwhelming Votes to Block Trump from Saving Chinese Telecom Giant

A pedestrian walks past a store of ZTE in Hangzhou city, east China's Zhejiang province, on May 14, 2018. (Imaginechina via AP Images)

Sen. Marco Rubio (R-Fla.) promised veto-proof action from Congress to block President Trump from pulling a Chinese telecom giant deemed a national security risk out from under the weight of sanctions, and lawmakers showed their displeasure today by overwhelmingly supporting a block.

In a 23-2 vote, the Senate Banking Committee approved an amendment from Sen. Chris Van Hollen (D-Md.) that would prohibit the president from changing penalties on Chinese telecommunication companies under sanctions until the administration certifies to Congress that the entity is no longer violating U.S. law, has not done so for a year, and is fully cooperating with investigators.

More than a week ago, Trump vowed to help Chinese telecom giant ZTE, which has been the subject of equipment bans for suspected espionage as well as a violator of Iran and North Korea sanctions, get back on its feet.

Top officials from the CIA, NSA, FBI and the Defense Intelligence Agency testified at a Senate Intelligence Committee hearing in February that smartphones made by Chinese tech companies Huawei or ZTE posed a security risk. The Pentagon recently banned U.S. bases from selling Huawei and ZTE devices in retail stores, as they “may pose an unacceptable risk to the department’s personnel, information and mission.”

Last month, Commerce Secretary Wilbur Ross announced that his department’s Bureau of Industry and Security imposed a denial of export privileges against ZTE. The company agreed to a combined civil and criminal penalty and forfeiture of $1.19 billion in March 2017 after illegally shipping telecommunications equipment to Iran and North Korea, making false statements, and obstructing justice. This year, the Commerce Department discovered that ZTE made false statements to BIS during the settlement period and during the 2017 probationary period.

Also in 2016, ZTE was found to have been one of the manufacturers behind carefully concealed backdoor spyware placed on more than 700 million Android phones.

On May 13, Trump tweeted, “President Xi of China, and I, are working together to give massive Chinese phone company, ZTE, a way to get back into business, fast. Too many jobs in China lost. Commerce Department has been instructed to get it done!”

A few hours later, Trump tweeted, “China and the United States are working well together on trade, but past negotiations have been so one sided in favor of China, for so many years, that it is hard for them to make a deal that benefits both countries. But be cool, it will all work out!”

The Wall Street Journal reported today that the Trump administration and China have agreed on a “broad outline” to lift sanctions on ZTE.

In response, Rubio, who has introduced legislation to ban the federal government or subsidiaries and contractors from purchasing telecommunications equipment or services from Huawei and ZTE, tweeted that if the story was true then the administration “has surrendered to #China on #ZTE.”

“Making changes to their board & a fine won’t stop them from spying & stealing from us. But this is too important to be over,” he said. “We will begin working on veto-proof congressional action.”

Van Hollen thanked his colleagues and said Congress “must continue to work to stop the president from absolving ZTE of its many transgressions in the interest of Chinese jobs.”

“We know ZTE is a repeated and flagrant violator of U.S. laws – there’s absolutely no question of their culpability,” he said. “Yet the president of the United States is fighting to protect jobs in China at a company that may be spying on Americans and has been sanctioned by our government. This is deeply troubling, regardless of your political party.”