US lawmakers agree to pull back from ZTE ban, in victory for Donald Trump
US senators concede to weaker anti-ZTE legislation, although stronger scrutiny of foreign investment could pose a future obstacle to fellow Chinese firms
US lawmakers have reached a deal to not reinstate a ban on ZTE that crippled the Chinese telecommunications company for violating US business laws, in a victory for US President Donald Trump’s administration.
Some senators backed down from their attempt to reimpose the ban placed by the Commerce Department in April that prevented ZTE from buying any American components, effectively shuttering it, according to a conference report released on Tuesday.
A compromise amendment, which is part of the must-pass Defence Appropriation Bill, adopts the House of Representatives’ softer language, which stops the Pentagon from buying ZTE products on national security grounds.
While that part of the National Defence Authorisation Act (NDAA) works in China’s favour, another amendment included in the bill means some Chinese investors in the US may face higher obstacles, particularly if they are attempting to acquire or merge with companies developing advanced technologies.
The Foreign Investment Risk Review Modernisation Act (FIRRMA), a bill introduced by a bipartisan slate of senior lawmakers last year as a check on China’s efforts to acquire technologies that could be used to undermine US national security, will be part of NDAA.
The House and Senate agreement stresses the importance of replacing ZTE’s equipment and service contracts with “rural communications service providers, anchor institutions, and public safety organisations as soon as practicable”, but it no longer seeks to reimpose penalties on the company.