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ZTE will reportedly pay total of $1.7B to lift US Commerce Department ban
by Jessica Dolcourt
Chinese telecom giant ZTE said its major operations had ceased following last month’s US ban on American sales of critical technology to the company.
Johannes Eisele / AFP/Getty Images
Embattled Chinese telecommunications manufacturer ZTE may be alive after all.
The company has agreed in principle to a settlement that would lift the Commerce Department ban preventing US companies from doing business with ZTE, according to a Reuters tweet. In exchange, ZTE would have to pay a total of $1.7 billion in penalties, according to the the report. The preliminary deal includes a $1 billion fine and $400 million in escrow in case of future violations. This comes on top of the $361 million ZTE had already paid under the original settlement.
The ban had been put in place for ZTE’s failure to see through the proper punishment for doing business in Iran and North Korea, and it had proved crippling, forcing the Chinese company to shut down major operations. ZTE seemingly had little hope of survival until President Donald Trump tweeted that he was pushing the Commerce Department to work with ZTE to remove the ban —– an unprecedented move by a US president to countermand one of his own departments.
Members of Congress on both sides of the aisle criticized Trump’s tweet as irresponsible, prompting him to defend his position with yet another tweet. ZTE, the fourth-largest smartphone maker in the US by market share, “buys a big percentage of individual parts from U.S. companies.” He also said ZTE was “reflective of the larger trade deal we are negotiating with China and my personal relationship with President Xi.”
On Tuesday, Charles Schumer, a Democratic senator from New York, tweeted that the deal shows Trump put China, and not the US, first. “The president who roared like a lion is governing like a lamb when it comes to China,” he tweeted, calling for Congress to take action.