US Commerce Secretary Wilbur Ross says the US government has reached a deal with Chinese electronics company ZTE to lift trade sanctions that threatened to put the company out of business.

Speaking on CNBC this morning, Ross says ZTE has agreed to pay a $1 billion fine, make changes to its executive team and board of directors, and work with a compliance team selected by US officials.

The new penalty comes on top of $1.2 billion ZTE has already paid for violating US sanctions on North Korea and Iran by selling products with US components to those countries.

When ZTE agreed to pay that fine a few years ago, the company also agreed to take disciplinary action against key employees who were said to be responsible. But in April the US Commerce Department said that ZTE had failed to do so, and in response the agency issued a ban that would have prohibited US companies from selling products to ZTE for 7 years.

ZTE is said to get around a third of its components from US companies including chip maker Qualcomm, and in May the company suspended all major operations while trying to work out a deal that would allow it to move forward.

The issue has become something of a political hot potato in the United States. While the move was ostensibly in response to a violation of an earlier agreement regarding trade with Iran and North Korea, US officials have been concerned about the national security implications of widespread sales of Chinese-made phones from ZTE, Huawei, and others in the US.

So after President Donald Trump’s hand-picked Commerce Secretary, Wilbur Ross, announced the trade ban earlier this year, a number of members of Congress expressed disappointment when President Trump indicated that he was interested in finding a way to lift the new trade restriction.

Ultimately, it’s unlikely that Congress will be able to stop the new deal from going into effect though.

Support Liliputing

Liliputing's primary sources of revenue are advertising and affiliate links (if you click the "Shop" button at the top of the page and buy something on Amazon, for example, we'll get a small commission).

But there are several ways you can support the site directly even if you're using an ad blocker* and hate online shopping.

Contribute to our Patreon campaign

or...

Contribute via PayPal

* If you are using an ad blocker like uBlock Origin and seeing a pop-up message at the bottom of the screen, we have a guide that may help you disable it.

Subscribe to Liliputing via Email

Enter your email address to subscribe to this blog and receive notifications of new posts by email.

Join 9,547 other subscribers

5 replies on “ZTE to pay $1 billion fine to have US trade sanctions lifted”

  1. As much as I think it is a good idea to support American companies, this sort of reeks like extortion or similar. “I’ll tell you what, you pay us an upfront ‘fee’, and we will allow you to get back in our good graces”

    1. You should read the article and maybe Google for more background. You seem to be misunderstanding everything.

Comments are closed.