Trump, U.S. lawmakers meet to discuss 'problematic' measure on China's ZTE

WASHINGTON (Reuters) - U.S. President Donald Trump and a group of Republicans from the Senate and House of Representatives met at the White House on Wednesday to discuss their disagreement over how to penalize Chinese telecommunications company ZTE Corp <000063.SZ> <0763.HK>.

The Trump administration moved to lift a ban on the company doing business with U.S. suppliers, but the Republican-led U.S. Senate on Monday included an amendment to kill the settlement as part of a defence policy bill it approved.

White House spokeswoman Lindsay Walters had said the meeting would focus on the "problematic" amendment to the defence bill, but the gathering ended up largely addressing an ongoing furore about the Trump administration's policy of separating migrant children from their parents at the U.S. border.

After the meeting, a spokeswoman for Republican Senator Tom Cotton, who attended and is a lead sponsor of the amendment, said ZTE was discussed, but offered no further details.

"He will continue to work with his colleagues to find a solution that protects our national security and Americans' privacy from Chinese telecom companies," spokeswoman Caroline Tabler said via email.

Republicans and Democrats have expressed national security concerns about ZTE and another major China-based telecommunications company, Huawei Technologies Ltd [HWT.UL]. But their ire against ZTE rose after it broke an agreement to discipline executives who conspired to evade U.S. sanctions on Iran and North Korea.

ZTE has agreed to pay a $1 billion (£758.8 million) penalty and put $400 million in an escrow account in a U.S. bank as part of the settlement reached on June 7 to allow it to do business again with U.S. suppliers.

Shares of the Chinese telecommunications firm and its U.S. business partners fell after the Senate vote, although the measure could still be killed when Senate and House lawmakers meet in the coming weeks to forge a compromise version of the National Defense Authorization Act.

(Reporting by Roberta Rampton and Patricia Zengerle; editing by Jeffrey Benkoe and G Crosse)