US Senate rejects Trump's deal to lift ban on Chinese tech giant ZTE after intelligence warnings

The US senate has voted to reinstate a ban on China's ZTE, despite President Donald Trump's attempts to lift sanctions on the telecommunications company.

ZTE essentially shutdown operations in May after it was banned from importing US components for seven years for misleading regulators about violating sanctions on North Korea and Iran. But, on Trump's orders, fewer than two weeks ago the administration made a deal to end ZTE's sanctions in exchange for a $1 billion fine, a move that was originally part of a larger trade deal that was unpopular with both Republicans and Democrats.

On Monday night, the Senate tried to take control of the situation by passing the annual National Defense Authorization Act, which included an amendment to stop Trump's deal allowing US companies to trade with ZTE. The legislation, which is considered crucial for continuing defense funding, was passed with 85-10 votes, one of a handful of times the Republican-controlled Senate has deviated from a Trump policy.

But the amendment is not guaranteed to become law. The bill will now need to be reconciled with a House version — where the amendment could be stripped out — voted through both the House and the Senate, and signed into law by Trump.

National security concerns appear to have been a crucial factor with US Senators Marco Rubio, Tom Cotton, Chuck Schumer, and Chris Van Hollen releasing a joint bipartisan statement.

"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," they said.

Senate Intelligence Committee Vice Chairman Mark Warner also tweeted that the Senate had "blocked" the Trump administration from making a "bad deal with ZTE."

"If the President won't act on warnings from his own top intelligence officials about the dangers posed by ZTE, we will," Warner said.

Earlier this year six intelligence chiefs — including the heads of the CIA, FBI, and NSA — testified they do not use, and would not recommend private citizens use products from ZTE or China's Huawei. And the Pentagon announced in early May that it had stopped selling Huawei and ZTE phones and modems in stores on its military bases because they "may pose an unacceptable risk."

And last month FBI Director Christopher Wray told a Senate hearing that the agency is "deeply concerned" about companies like ZTE.

"We the FBI remain deeply concerned that any company beholden to foreign governments that don't share our values are not companies that we want to be gaining positions of power inside our telecommunications network that gives them the capacity to maliciously modify or steal information, that gives them the capacity to conduct undetected espionage, that gives them the ability to exert pressure or control," Wray said when asked about the risks of giving ZTE more access to the US market.

There have also been allegations in recent months that ZTE was established for the very purpose of spying on other countries.

Despite these concerns, after ZTE was hit with sanctions, Trump ordered the Commerce Department to lift the ban and help ZTE "get back into business, fast." The timing raised questions as three days earlier the Chinese government agreed to provide $500 million in loans to an Indonesian theme park that the Trump Organization has a deal to license President Donald Trump's name to.