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ZTE may live, as Trump administration reportedly reaches deal to revive it

27 May 2018

The issue of chip technology is now in the spotlight after the US Department of Commerce in April banned the export of American technology components and operating systems to ZTE, one of China's biggest makers of telecommunications hardware and smartphones, for breaching the settlement terms in a violation of Iran and North Korea trade sanctions.

It's the latest twist in a saga of geopolitics and high technology that has its roots in ZTE's violations of USA sanctions against Iran back in 2010.

Under the new agreement, after ZTE makes a series of changes in its management, it would be allowed to resume business with US companies, including a key supplier, chipmaker Qualcomm.

"Dems do nothing." ZTE will be required to pay an additional fine, instate American compliance officers, and get rid of their current board members.

The Commerce Department reportedly brokered a deal that would lift the ban that keeps ZTE from buying American products. A deal first reported by the New York Times would allow the company to re-enter the us market after it meets certain terms such as paying a fine and hiring USA compliance officers. It is publicly traded, but the largest shareholder is a Chinese government-run company. In the meantime, the House of Representatives has passed a defense authorization bill that would prohibit government agencies from buying ZTE products or contracting companies that do business with ZTE.

The company has lost over $3 billion since the April 15th ban on doing business with U.S. suppliers, according to a source familiar with the matter.

The denial order - issued as punishment for violating USA sanctions against Iran and North Korea - has crippled the company and threatened the jobs of thousands of Chinese workers.

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Republican Sen. Marco Rubio of Florida tweeted: "It is a great deal ... for #ZTE & China ..."

A completed deal is considered a key piece of the ongoing trade negotiations with China.

Democratic Sen. Chuck Schumer of NY criticized the reported deal: "President Trump would be helping make China great again. Would be a huge victory for President Xi, and a dramatic retreat by Pres Trump", he tweeted. An organization called Citizens for Responsibility and Ethics in Washington, D.C. (CREW), said the trademark deal again raises the alarm about the Trump family's worldwide businesses and potential conflicts of interest.

U.S. intelligence and United States law enforcement agencies have serious concerns that ZTE and other Chinese telecommunications firms use their equipment to gather intelligence on USA citizens.

ZTE was crippled following sanctions from the US. To get rid of the ban ZTE needs to purchase U.S parts, this move is quite confusing because the company already purchase several US-made components, which includes Qualcomm processors and Intel-made modems.

In a follow-up tweet he called the "so called Trade Deals" struck by Democrats "the laughing stock of the world!"

United States Secretary of Commerce Wilbur Ross is scheduled to travel to China on June 2nd. ZTE has estimated losses of at least 20 billion yuan (US$3.1 billion) from the USA technology ban, according to a Bloomberg news report citing people familiar with the matter. The firm needs US components for its mobile phones and network equipment. ZTE only fired four of the employees and gave bonuses to thirty-five employees involved in the debacle. USA -traded shares of NXP Semiconductors NV rose 4.7 percent after the announcement, as signs of better U.S.

ZTE may live, as Trump administration reportedly reaches deal to revive it