Congress could still effectively ban ZTE from getting US parts

ZTE shares in Hong Kong and Shenzhen will finally begin trading again on Wednesday after the company imposed a two-month suspension. The tech manufacturer is preparing to get back into business as it clears penalties laid by the US Commerce Department to begin sourcing components from American companies again.

Investors are skiddish at the company’s prospects as it will have to operate under compliance monitors and change out the entire boards of two of its controlling entities. But the biggest problem could from within the United States itself as this executive branch initiative may clash with the will of Congress.

House and Senate committees have been working on getting legislation to block the federal government from using budgeted funds to buy ZTE equipment. Intelligence officials regard the Chinese company as a cybersecurity threat that’s easily swayed by the nation’s authoritative government, which has been engaging in censorship and is accused of exploitation.

The Senate is said to be close to passing the National Defense Authorization Act — providing the annual budget for the Defense Department — that includes a provision stopping US-based contractors from selling equipment to ZTE and prevents the government from doing business with the firm. Chinese cohort Huawei is also said to be a target in the bill.

The bill is expected to pass within the week and, provided that the House also approves, move to President Donald Trump’s desk where he will either sign it into law or veto it. The House and Senate would be able to overturn the veto with two-thirds of each legislature voting to affirm. Trump has been advocating for removal of the ban to help ZTE get back into business.

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About The Author
Jules Wang
Jules Wang is News Editor for Pocketnow and one of the hosts of the Pocketnow Weekly Podcast. He came onto the team in 2014 as an intern editing and producing videos and the podcast while he was studying journalism at Emerson College. He graduated the year after and entered into his current position at Pocketnow, full-time.