June 7, 2018 / 7:49 PM / a month ago

UPDATE 1-U.S. lawmakers scramble for way to block Trump deal with China's ZTE

(Adds details on legislation, supporters and timing)

By Patricia Zengerle

WASHINGTON, June 7 (Reuters) - Republican and Democratic U.S. senators introduced legislation on Thursday that would roll back an agreement President Donald Trump’s administration announced to ease sanctions on Chinese telecommunications company ZTE Corp.

Commerce Secretary Wilbur Ross said on Thursday the U.S. government had reached a deal with ZTE that reverses a ban on it buying parts from U.S. suppliers, allowing China’s No. 2 telecommunications equipment maker to get back into business.

The Senate measure would restore penalties on ZTE for violating export controls and bar U.S. government agencies from purchasing or leasing equipment or services from ZTE or Huawei Technologies Co Ltd, another major Chinese firm.

It would also ban the U.S. government from using grants or loans to subsidize Huawei, ZTE or any subsidiaries or affiliates.

The legislation has bipartisan support. It was introduced by Senate Democratic Leader Chuck Schumer and fellow Democratic Senator Chris Van Hollen, as well as Republican Senator Tom Cotton, a close Trump ally who has emerged as one of his party’s most influential foreign policy voices.

Co-sponsors include Republican Senators Marco Rubio and Susan Collins, and Democrats Richard Blumenthal and Bill Nelson.

They offered the legislation as an amendment to the National Defense Authorization Act, or NDAA, a defense policy bill Congress passes every year. The Senate is expected to debate the NDAA next week, and it should become clear then whether the amendment would be allowed to come up for a vote.

Backing for the amendment would be a departure for Trump’s fellow Republicans, who control Congress. Republican lawmakers have generally been strong supporters of Trump’s legislative agenda, with only a handful of members voting only very rarely against the White House since he took office in January 2017.

A U.S. investigation into ZTE was launched after Reuters reported in 2012 the company had signed contracts to ship hardware and software worth millions of dollars to Iran from some of the best-known U.S. technology companies. (reut.rs/2GbpCmO)

Reporting by Patricia Zengerle Editing by Susan Thomas and Lisa Shumaker

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