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White House, Legislators Discuss Move To Block ZTE Deal On Iran Sanctions

A ZTE building in Beijing
A ZTE building in Beijing

U.S. President Donald Trump met with Republican lawmakers on June 20 after the Senate moved to block a White House plan to allow Chinese telecom giant ZTE Corp. stay in business despite violating U.S. sanctions against Iran and North Korea.

ZTE is accused of selling sensitive technologies to North Korea and Iran. The administration originally barred ZTE from purchasing equipment from U.S. technology firms, but after the company complained that the ban would put it out of business,Trump negotiated a more lenient deal with China.

Under the Trump deal, ZTE could keep buying equipment from U.S. companies if it pays another $1 billion in fines for its sanctions violations and shakes up the company's management.

But opponents in Congress said the deal went too easy on ZTE and added an amendment to block it to a massive defense bill that passed the Senate this week.

Participants said White House officials indicated in their meeting with legislators on June 20 that they prefer the narrower restrictions on ZTE in the House defense bill that would prevent the company from selling equipment to the U.S. government.

Senator John Cornyn said after the meeting that the administration was trying to differentiate between U.S. government purchases and non-government purchases of ZTE cell phones and services.

"Obviously government procurement is much more sensitive when it comes to national security," Cornyn said.

But Senate Democratic Leader Chuck Schumer warned the Republican senators that they shouldn't "water down or back off the Senate's strong language on ZTE in the defense bill."

He said protecting U.S. national security "must remain paramount and not something that we can compromise on."

Based on reporting by AP and Reuters