Congress abandoned a bipartisan attempt to undo President Donald Trump’s deal with Beijing to save Chinese telecommunications giant ZTE Corp., according to people familiar with the matter.

Senate and House negotiators removed from a must-pass defense bill, expected to become law as soon as this month, language that sought to reinstate a ban on U.S. companies selling components to the Chinese business, the people said. Because ZTE depends on U.S. suppliers, the ban, which Mr. Trump decided to lift, had effectively been a death...