House Renews Sanctions For China's ZTE - Despite Trump's Appeals

s’Congressional lawmakers from both parties unanimously supported an amendment to renew sanctions against Chinese telecommunications giant ZTE as a part of the Commerce, Justice and Science Appropriations Bill for the fiscal year 2019.

Winning the unanimous support of both Republicans and Democrats on the House Appropriations Committee, this amendment moves forward with a legislative package that would further nail the coffin shut when it comes to publicly-traded ZTE’s market survival.

"I am proud that today’s amendment maintaining penalties on the shady Chinese cellular company ZTE received unanimous support in the Appropriations Commerce, Justice, and Science Subcommittee,” said Congresswoman Rosa DeLauro (D-CT), a co-sponsor to the amendment.

DeLauro added: “We, as the Congress, need to step up to protect American workers, and American national security, from a company that experts inside and outside government agree, endangers American interests. This is not a company that President Trump should be trying to save. He promised to protect American jobs and claims to be all about ‘America First.’ I suppose not—this move is clearly China First.”

The leading force behind the amendment, Congressman Dutch Ruppersberger (D-MD), brought forth the proposal as a means to curtail the efforts of U.S. President Donald Trump to coordinate with Xi Jinping, the president of China, to recover ZTE’s economic downturn in the Chinese labor market.

“This amendment, which passed with the unanimous support of my colleagues on both sides of the aisle, shows that, when the United States enacts sanctions, we stand behind them,” Congressman Ruppersberger said in a statement. “It will also prevent a foreign company that is beholden to its government – and that ignores embargoes – from infiltrating the devices and networks that are now indispensable to American life.”

Ruppersberger’s amendment was passed on a voice vote and directly "prohibits funds to be used in contravention of the ZTE suspension order," in an applicable fashion over executive branch operations. Now, the bill advances and is likely to pass in its current form and sent directly to President Trump’s desk for official ratification.

ZTE was sanctioned by the U.S. Department of Commerce and other entities within the Trump administration for breaking federal trade control laws. According to Commerce Secretary Wilbur Ross, his department’s Bureau of Industry and Security "imposed a denial of export privileges against Zhongxing Telecommunications Equipment Corporation, of Shenzhen, China (“ZTE Corporation”) and ZTE Kangxun Telecommunications Ltd. of Hi-New Shenzhen, China (“ZTE Kangxun”) (collectively, “ZTE”)."

Simply put, Trump’s Commerce Department has prohibited further sale and trade with ZTE products and manufacturing components from and to American sources. Due to the imposition of these sanctions, the fervor in the U.S.-China trade war exponentially worsened. Nevertheless, the administration claims that the sanctions were justified due to ZTE’s business transactions with sanctioned entities from Iran and North Korea.

Amid these claims, ZTE also agreed to a sanctions platform that stemmed from obstruction of justice and making false statements to the U.S. federal governments. The sanctions highlight, specifically, that ZTE is subject to a seven-year suspension for denial of export privileges "which could be activated if any aspect of the agreement was not met and/or if the company committed additional violations of the Export Administration Regulations (EAR)."

“ZTE made false statements to the U.S. Government when they were originally caught and put on the Entity List, made false statements during the reprieve it was given, and made false statements again during its probation,” said Ross.

After these sanctions were levied, Trump took to Twitter to announce that he was going to direct Ross and his department to assist ZTE and the Chinese government to reduce the negative impact the sanctions had on local economies.

"Too many jobs in China lost. Commerce Department has been instructed to get it done!” Trump tweeted.

If Ruppersberger’s amendment passes in the legislature and is signed into law, funds allocation to assist specifically with ZTE recovery will be withheld.

This series of unfortunate events has killed ZTE’s stock price while adding additional trepidation that the prevention from trading in the U.S. market has virtually killed the company

"ZTE will not give up its efforts to resolve the issue through communication, and we are also determined, if necessary, to take judicial measures to protect the legal rights and interests of our Company, our employees, and our shareholders, and to fulfill obligations and take responsibilities to our global customers, end-users, partners and suppliers," the company announced in April.

Additionally, American consumers–the millions of them who have ZTE phones or ZTE-built components–will be greatly impacted, as well. According to a few reports, ZTE users were unable to get the latest version of Android installed on their phone. The negation of support could render ZTE devices useless when the time comes.