China's No. 2 telecommunications equipment maker was crippled when a seven-year supplier ban was imposed on the company in April for breaking a 2017 agreement reached after it was caught illegally trading with Iran and North Korea.
In a statement to reporters, amendment co-sponsor Sen.
The telecom company is considered by the intelligence community to be a mechanism for espionage by, in part, selling phones in the USA that can be tracked and enabled to steal intellectual property.
ZTE employs 70,000 workers in China and is the fourth-largest vendor of mobile phones in the U.S.
Republican and Democratic lawmakers introduced the amendment last week.
The Senate's move comes less than a week after the administration struck an agreement with ZTE that would have kept the telecom company engaged in the USA market.
Earlier this year, United States officials banned ZTE from working with U.S. companies - a move brought on by revelations that the company shipped US-made parts to Iran and North Korea and then lied about giving company executives involved with the deals large bonuses.
However, in May the president tweeted that he was working with China to keep ZTE running and hoped a deal would prevent "too many jobs in China" from being lost. Among other things, it would restore penalties on ZTE for violating USA export controls and bar US government agencies from purchasing or leasing equipment or services from the Chinese company. The U.S. export ban would be lifted in exchange for a $1 billion fine, $400 million in escrow to cover future issues, the naming of a new Board and executive team, and the installation of a U.S. selected compliance team that would be put in place at ZTE headquarters.
ZTE cellphones in their packaging. Tom Cotton (R-Ark.), one of the chief authors of the amendment.
ZTE, the fourth largest smartphone vendor in the USA, has been in the news nearly daily since the Commerce Department lifted a stay it placed on a US export ban against the firm. Marco Rubio (R-Fla.), another chief backer of the amendment. The move by senators on Monday to include it in the annual must-pass defense bill came just hours before Trump meets with North Korean leader Kim Jong Un.