US: Sanctions hit ZTE hard

ZTE, the Chinese telecom firm, may see losses of as much as US$3.1 billion amid a continuing ban from the US government on US firms supplying components and materials to ZTE.

The estimates came Wednesday morning, May 23, from Bloomberg, which cited unnamed sources.

Bloomberg also reported that ZTE remains “hopeful” that its home country, China, and the United States will be able to strike a deal to break that ban. Once that happens, ZTE will be able to start up factories that have remained dark in the wake of the ban.

Separately, Reuters also reported that President Donald Trump on Tuesday “floated a plan” to fine the Chinese tech firm and “shake up its management” even as the Trump administration is considering scaling back some of the more severe penalties in place that have, at least in part, led to the financial impact and losses as mentioned above.

The proposal is getting pushback from Congress, and across both parties, as critics charge Trump is, as Reuters termed that criticism, “bending to pressure” from China even as the company has admitted to skirting sanctions the US has in place on Iran.

Trump has said that US tech firms had been hurt by a Commerce Department mandate from last month stating that those firms cannot sell components to ZTE.  Trump had suggested that the firm be hit with a US$1.3 billion fine, and a shakeup of management and its board of directors. Reuters stated that “it was not clear whether he had the legal authority to impose new financial penalties.”

Trump said: “They can pay a big price without necessarily damaging all of these American companies.”

Full Content: PYMNTS

Want more news? Subscribe to CPI’s free daily newsletter for more headlines and updates on antitrust developments around the world.