The trade rift between China and the United States which also concern the supply ban placed on ZTE has marked yet another chapter, which may actually be the end of the ZTE’s troubles.
In a post by Donald Trump on popular social media platform, Twitter, the President stated that “let [ZTE] reopen”, a sign that a deal has been reached with the Chinese telecom giant.
“Senator Schumer and Obama Administration let phone company ZTE flourish with no security checks. I closed it down then let it reopen with high-level security guarantees, change of management and board, must purchase U.S. parts and pay a $1.3 Billion fine.”
Trump aimed a jab at the Obama’s administration in a move to score points for himself, also stating that ZTE will have to commit to board and management change, purchasing more than half of its hardware components from the U.S. and also pay a fine of $1.3 billion.
“Dems do nothing but complain and obstruct. They made only bad deals (Iran) and their so-called Trade Deals are the laughing stock of the world!”
In addition, sources close to Bloomberg reported that ZTE will have to throw its doors open and let in US compliance officers and give them full access to its operations to make sure they conform to U.S. trade and commerce laws. There are doubts whether China will actually agree to this particular terms due to the sensitive nature of ZTE’s business dealings, but they also don’t have a choice in this matter.
Majority of Congress are still against this deal, as they believe the Chinese government is pressuring the Trump’s administration to lift the ZTE supply ban. The Congress can still bring up a bill which will put a stop to the deal.
ZTE is the China’s second largest telecom company after Huawei, it has lost an amount close to $3.1 billion since the suspension of its operations, while most of its factories and workers are left idle. Since the announcement of the deal, ZTE’s stocks have appreciated, with the company also planning to resume operations immediately after the ban is lifted.