Well that was a roller coaster ride. After months of back and forth, the US has lifted the ban that prohibited US companies from selling goods to Chinese electronics company ZTE.
The trade restrictions were put in place in response to ZTE violating US sanctions against Iran and North Korea… and then failing to comply with a previous US settlement.
Under a new agreement worked out with the US Commerce Department, ZTE has paid a $1 billion penalty and put $400 million more into an escrow account, while working with a US-selected compliance team for the next 10 years and making leadership changes.
ZTE may be based on China, but the company sells its products across the world… and sources its components from around the world as well. The sanctions announced in April effectively put ZTE out of business temporarily, since the company relies on US companies for about a third of the components use in its devices.
While the company has agreed to pay a $1.4 billion penalty, Reuters notes that ZTE posted a net loss of almost as much money (somewhere between $1.05 billion and $1.34 billion) between the months of January and June of 2018. During the same period in 2017 the company had a net profit of $2.3 billion.
With the trade ban lifted, ZTE is free to resume normal operations, which means that maybe we’ll see the company’s rumored dual notch smartphone or other oddities soon.
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