The United States and China have reached a deal that allows the Chinese telecommunications giant ZTE Corp.to stay in business in exchange for paying an additional $1 billion in fines and agreeing to let USA regulators monitor its operations. He countered by highlighting that ZTE "buys a big percentage of individual parts from USA companies" and saying the telecom giant's fate reflects the U.S. relationship with China. The government will suspend the 10-year ban but it can activate the ban if there are any violations.
The deal includes a $1 billion penalty against ZTE, and a compliance team, chosen by the United States, will be embedded at the company, Commerce Secretary Wilbur Ross told CNBC Thursday morning.
Trump appeared to confirm that a deal had been reached in a tweet on May 25, but subsequent broader U.S. trade talks in Beijing on USA tariffs on aluminium and steel ended inconclusively with no mention of the ZTE matter.
"We still retain the power to shut them down again", Commerce Secretary Wilbur Ross said Thursday in an interview on CNBC. It also includes $400 million in escrow to cover any future violations and requires ZTE to change its board of directors and executive team within 30 days.
Ross said on Thursday the penalty is the largest the Commerce Department has ever levied.More news: Flying car startup backed by Google founder offers test flights
ZTE could not be reached for comment by either Reuters or the Post.
However, last month, Trump tweeted that "too many jobs in China" were being lost because of the US action and that he had instructed the Commerce Department to find a solution. China has vowed to retaliate on everything from US soybeans to airplanes, and said it will abandon its commitments if the USA follows through on its tariff threat.
Commerce had imposed a seven-year ban on ZTE doing business in the U.S.in April as part of a package of penalties levied after the company sold American-made products to Iran, a violation of US sanctions. For other USA companies, ZTE is a supplier.
Despite opposition in Congress, the DoC announced today that it reached a deal with ZTE to end sanctions. The agreement signals that China will be more likely to approve the $43 billion acquisition of NXP by Qualcomm Inc., a deal that has been pending for 18 months. "I hope it means something good to us, but we are really focused more on our individual application", Mollenkopf told a corporate governance conference in NY.
ZTE supplier Oclaro Inc rose nearly 1 percent while Acacia Communications Inc was down 1.5 percent. ZTE's failure to comply with these terms triggered the suspended denial order that prohibits American companies from doing business with the Shenzhen-based company, plunging it into crisis.