Deal Would Allow ZTE To Work With US Suppliers Again


A month after ZTE was banned from buying tech components from American companies after reportedly breaking U.S. sanctions against North Korea and Iran, the company may have a reprieve: The Trump administration has reportedly told lawmakers that it has come to a deal with the Chinese tech firm, Reuters reported.

Here’s how the deal reportedly works: After ZTE pays a fine, makes changes to its management team and adds American compliance officers, the Commerce Department will reportedly lift the restriction. ZTE would then be able to work with U.S. firms such as Qualcomm Inc. again.

While the White House didn’t immediately confirm the deal to Reuters, Republican Senator Marco Rubio tweeted about it. “Yes they have a deal in mind. It is a great deal … for #ZTE & China,” Rubio wrote on Twitter. “#China crushes U.S. companies with no mercy & they use these telecom companies to spy & steal from us.”

The news comes as ZTE may see losses of as much as $3.1 billion (¥20 billion) amid a continuing ban from the U.S. government on U.S. firms supplying components and materials to ZTE. The estimates were reported on Wednesday (May 23) from Bloomberg, which cited unnamed sources. Bloomberg also reported ZTE remained “hopeful” China and the United States would able to strike a deal to break the ban.

Separately, Reuters also reported that President Donald Trump on Tuesday (May 22) “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 mentioned above. The proposal was getting pushback from Congress and across both parties, as critics charge Trump is, as Reuters termed it, “bending to pressure” from China even as the company has admitted to skirting sanctions the U.S. has in place on Iran.


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