White House seeks to block Congress from killing ZTE deal: Report

The building of ZTE Beijing research and development center in Beijing, China, on June 13, 2018. PHOTO: REUTERS

WASHINGTON (REUTERS) - The White House will try to derail an effort in the US Congress to block the Trump administration's deal to allow ZTE Corp, China's No. 2 telecommunications equipment maker, to resume doing business with American suppliers, the Wall Street Journal reported on Wednesday (June 13).

The ZTE issue encompasses US-China relations, national security, trade and President Donald Trump's ties to fellow Republicans in the Senate.

The administration wants to change legislative language in a defense spending bill before the Senate, but will intervene later in the legislative process, the Journal said, citing a senior White House official.

The Senate was expected to pass its bill as soon as this week.

It will later need to be reconciled with a defense spending measure already passed by the House of Representatives.

The White House was not immediately available for comment.

Republicans, who control both chambers of Congress, and Democrats expressed national security concerns about ZTE after it broke an agreement to discipline executives who had conspired to evade US sanctions on Iran and North Korea.

The United States had banned the company but later moved to lift the ban.

In a settlement with the US Commerce Department, the company agreed earlier this week to pay a US$1 billion fine, overhaul its leadership and meet other conditions, including putting US$400 million in escrow in a US-approved bank.

A Commerce Department spokesman did not immediately respond to a request for comment on the Journal report.

ZTE shares plunged in Hong Kong and Shenzhen on Wednesday following the settlement, with investors wiping about US$3 billion off its market value.

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