US Senate votes to reimpose ban on China's ZTE

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00:55

The US Senate defied President Donald Trump by voting on Monday to overrule his administration's deal with Chinese telecom firm ZTE and reimpose a ban on selling high-tech chips to the company.

Senators added an amendment targeting ZTE into a sweeping, must-pass national defense spending bill that cleared the chamber on an 85-10 vote.

But before it can become law, the bill must be reconciled with one already passed by the House of Representatives that does not include the amendment. Any compromising measures must then be passed by both chambers and signed into law by Trump.

ZTE’s Hong Kong-listed shares tumbled as much as 24 percent to 10.02 HK dollars, its lowest in nearly two years, while its Shenzhen shares fell by their daily limit of 10 percent.

ZTE was hit in April with a seven-year ban barring US suppliers selling to it.

At Trump’s urging, ZTE and the US Commerce Department reached an agreement on June 7 to have the ban lifted. According to the agreement, the ban would only be lifted after ZTE pays a 1-billion-US-dollar fine and puts another 400 million US dollars in escrow in a US approved bank for 10 years.

Last Wednesday, ZTE proposed a 10.7-billion-US-dollar financing plan and nominated eight board members as it seeks to rebuild its business.

Source(s): AFP ,Reuters