Is Trump’s ZTE deal headed to the graveyard?

The US Senate isn't keen on the deal with China and is making efforts to ensure it doesn't go through. Will Trump be able to salvage it?
19 June 2018

Trump is working hard to get the Republicans on his side for the ZTE deal. Source: Shutterstock

The olive branch that President Trump extended to China by way of the ZTE salvage deal seems to be in trouble.

Lawmakers in the US weren’t on the same page to begin with. In fact, soon after President Trump announced the decision to help the company, several senators expressed their displeasure.

In fact, the US Senate has, just yesterday, passed a US$716 billion defense policy bill that backs the President’s call for a bigger, stronger military but repeals the deal he’s offered to ZTE, the Chinese telecommunications systems company.

The Senate, controlled by Republicans, voted 85-10 for the annual National Defense Authorization Act (the NDAA).

This act, which authorizes US military spending, is also used as a vehicle for a range of policy matters and its terms spell doom for ZTE as it places a ban on US companies selling to ZTE.

However, there’s still hope. The bill won’t become a law just yet.

It must first be reconciled with another bill already passed by the House of Representatives, which does not feature the ZTE ban. This provides President Trump with an opportunity to save the deal.

In fact, Bloomberg has just announced that Trump is preparing to make a personal appeal to Republicans on his ZTE deal.

The provision of the bill blocking ZTE specifically was spearheaded by Senators Charles Schumer, Chris Van Hollen, Tom Cotton, and Marco Rubio and is something that Trump and the White House are keen on removing from the final bill.

“We’re heartened that both parties made it clear that protecting American jobs and national security must come first when making deals with countries like China, which has a history of having little regard for either. It is vital that our colleagues in the House keep this bipartisan provision in the bill as it heads towards a conference,” Cotton, Schumer, Rubio and Van Hollen said in a statement after the Senate’s vote.

Nevertheless, as things stand, the Senate bill faces an uphill struggle.

If passed as is, it bars the Defence Department from dealing with any entity using telecommunications equipment or services from Chinese companies such as ZTE or Huawei – which might make future negotiations with China more difficult.

The final document must be signed off by President Trump, and therefore, is likely to include a much less stringent provision.