Over the past few weeks, ZTE has been in turbulent waters over the US supply ban placed on it. Some good news came through earlier last week which indicated that the company’s troubles might soon be over. The reports stated that the United States and China finalizing a deal that could end the ban placed on ZTE.
According to The Wall Street Journal, the ZTE deal is one of the steps towards resolving the trade war between China and the United States.
“The U.S. and China have agreed on the broad outline of a deal that would save imperilled Chinese telecom giant ZTE Corp., according to people with knowledge of the matter in both countries, as the two sides move closer to resolving their trade dispute.”
Reuters also reported that –
“Washington neared a deal to lift its ban on U.S. firms supplying Chinese telecoms gear maker ZTE Corp, sources said on Tuesday [May, 22], and Beijing announced tariff cuts on car imports, further easing trade tensions between the world’s two largest economies.”
According to the above Reuters report, China would remove import tariffs placed on agricultural products imported from the United States, and will also be purchasing more of those products.
Although the China and the United States are close to reaching a settlement, ZTE will still have to pay the price for its disobedience. The Wall Street Journal also reported that –
“Instead, ZTE would be forced to make big changes in management, board seats and possibly pay significant fines, the people said.”
In a new development that arose today, Donald Trump stated that ZTE will be slammed a $1.3 billion fine in order for the sanctions imposed on it to be lifted. As reported by the BBC, apart from the fine, the Chinese company has to change its management, board of directors, and requirements for purchases of U.S. made goods.
Some US senators have shown discontentment over the deal, believing that the conditions for the agreement are too lenient.
A group of 27 senators decided to take actions by writing an open letter to the executive arm of the government “not to compromise lawful U.S. enforcement actions against serial and pre-meditated violators of U.S. law, such as ZTE.”
The supply ban was imposed on the Chinese company after the US discovered that it has been shipping hardware to Iran, in a move that violates the U.S. sanctions on Iran.