Bill to Stop ZTE Reprieve Contains Loophole; Senators Meeting With White House Wednesday
The Senate-passed defense authorization bill includes an amendment to retain ZTE's seven-year export ban (see 1806070040), though the Commerce Department keeps discretion to let the company continue importing semiconductors from U.S. sources, leading to some skepticism. Senate Majority Whip John Cornyn, R-Texas, is to meet Wednesday with administration officials and other lawmakers on Capitol Hill's battle with the White House over Commerce's decision to lift its ban on U.S. companies selling telecom software and equipment to ZTE. Secretary of Commerce Wilbur Ross and Sen. Tom Cotton, R-Ark., will attend, Capitol Hill officials told us.
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Language in the defense amendment "doesn't do anything," Derek Scissors, American Enterprise Institute China expert, said in an interview. "Why would you leave this vague like this? It's just a way to show we're tough on China." The Senate voted 85-10 Monday night on the FY 2019 National Defense Authorization Act (HR-5515).
Cotton, the amendment's lead sponsor, confirmed in a brief interview it's up to Commerce to interpret whether the last time ZTE broke the law was when it gave a false statement in July or when the department discovered the company wasn't compliant in March. "It will be a factual determination for the Department of Commerce," he said. "The forward-looking pieces of the amendment that I offered and was adopted last night are very important; they don't just apply to ZTE, they apply to Huawei and other Chinese telecom companies, and they say that the federal government will not buy their goods, and will not loan or grant money to anyone who does. That will stop those companies from being a national security threat."
The bipartisan amendment was led Cotton and Minority Leader Chuck Schumer. “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," said those two senators and co-sponsors Sens. Marco Rubio, R-Fla., and Chris Van Hollen, D-Md. "It is vital that our colleagues in the House keep this bipartisan provision in the bill as it heads towards a conference.” A congressional conference committee will need to reconcile the ZTE language in the two versions of HR-5515 (see 1806140065).
Cornyn confirmed to reporters Monday he and other lawmakers would meet with administration officials on ZTE but didn't say then who else would be involved. “I think the president wants to weigh in, and we want to listen to what he has to say,” Cornyn said: “Obviously, there's conflict” between the White House and some on Capitol Hill on the ZTE issue. “I hope our Republican colleagues will let the president know that they’re going to remain firm on this,” Van Hollen told reporters. “They cannot allow ZTE off the hook the way the administration’s let them off the hook.” The White House didn't comment Tuesday on whether Trump will veto HR-5515 if the ZTE language remains in the post-conference bill.