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ZTE can buy from American suppliers again

by Justin Herrick | May 25, 2018May 25, 2018 1:00 pm PST

ZTE and the U.S. Department of Commerce have reached an agreement that’ll keep the Chinese telecommunications giant in business.

As the U.S. government continues sorting out its trade dispute with China, ZTE will soon resume purchasing materials from American suppliers. The company was issued a seven-year ban after it ignored sanctions set in place last year, but the Trump administration quickly announced it would work toward a solution.

Based on what U.S. lawmakers have been told, ZTE won’t easily have the ban lifted and walk free. ZTE has been informed it’ll need to pay a fine and fire its management team. Following the completion of both activities, the company can continue operating as usual.

ZTE will also need to hire American compliance officers to be based within the company.

The catalyst for the ban was that, after pleading guilty in federal caught for illegally shipping products to Iran and North Korea, the company didn’t follow sanctions set in place.

ZTE was asked to pay more than $1 billion and reorganize its leadership. Since the company failed to do the latter, ZTE was blocked from engaging with American suppliers.

Donald Trump recently announced he’d been working with President Xi Jinping of China on a deal, and earlier in the week it appeared like the two sides were nearing a deal bringing ZTE back to normalcy. The U.S. and China, though, are still working on their larger trade dispute.

Some reports suggest ZTE was at risk of losing more than $3 billion from the ban.

In return, the Trump administration would like to see China relax its avoidance of U.S.-made products. The U.S., according to the New York Times, might make the deal official before the holiday weekend. Meanwhile, a number of lawmakers in Congress are concerned over national security.

Marco Rubio (R-FL) called out Trump and his cabinet for overlooking national security to further trade negotiations. Companies like ZTE and Huawei have long faced accusations of espionage. Both sides of the aisle largely agree that Chinese companies may be spying on Americans and handing their data off to the Chinese government.

With the Trump administration seemingly content, Rubio believes fellow members of the Senate and the House need to act together.

ZTE should be ready for business shortly. The U.S. government isn’t asking the company to do anything outrageous, and a previous report revealed ZTE would be ready to go again within hours of the ban being lifted.

Justin Herrick

Justin is easily attracted to power buttons. His interest in technology started as a child in the 1990s with the original PlayStation, and two...

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