It is Congress that has granted the exemption. The FAA seems to have been put into a position of powerlessness on this matter.
I don't think that the US Congress quite realises what this means for Boeing's international market. Just because the US Congress has passed a law hamstringing the FAA, that has zero bearing on the UK's CAA, Europe's EASA, China's CAAC, etc. Worse, it puts overseas regulators in a real bind. They could simply roll with it and let the MAX7/10 fly. However, if anyone asks the awkward question "Please explain your thinking around the evidence that this aircraft is safe to operate over our heads", the only answer they've got is "the US Congress says Boeing don't have to do it".
That's not really fulfilling the role of a national / regional aviation safety assurance agency. Furthermore, if anything actually went wrong the persons involved could find themselves in some personal legal / career difficulty. Especially in China.
Properly speaking, overseas regulators should be reacting to this politically granted exemption, along the lines of determining that the USA is bullshitting everyone else on safety. That doesn't mean that US built aircraft shouldn't fly in, say, the UK. However, overseas regulators are perfecttly justified in requiring Boeing to put their new products through their full certification process instead of just taking the FAA's word for it. The danger for Boeing is that the -7 and -10 could very well become restricted to US operations only, or they're forced to do the work properly for aircraft sold overseas.