YOU ARE AT:5GTrump announces conditions to allow ZTE to resume business

Trump announces conditions to allow ZTE to resume business


Trump said the Chinese vendor will need to pay a $1.3 billion fine, change its management and hire U.S compliance officers

U.S President Donald Trump said the U.S government will allow Chinese vendor ZTE to restart its business, after it pays another large fine and changes its management and board, among other details.

“I closed it down then let it reopen with high level security guarantees, change of management and board, must purchase US parts and pay a $1.3 billion fine,” Trump said in a tweet on 26 May in reference to the Chinese vendor.

Under the new deal, ZTE will hire American compliance officers, who will monitor the firm’s operations in order to guarantee the fulfillment of the agreement. The U.S department of Commerce will lift the export ban on ZTE once the Chinese vendor meets all the requirements of the deal, Bloomberg reported.

ZTE did not respond publicly to Trump’s tweet.

Republican and Democratic lawmakers have expressed concern over Trump’s decision to lift sanctions against ZTE. “This would be a big mistake. President Trump should listen to the advice of his intelligence leaders, who have unanimously said that ZTE poses a national security threat to the United States,” Democratic senator Mark Warner, Vice Chairman of the Senate Select Committee on Intelligence, said in a statement.

Meanwhile, Republican Senator Marco Rubio suggested that Congress would take steps to prevent ZTE from being able to operate in the United States.

Last month, the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) banned American companies from selling telecommunications equipment and services to ZTE during a seven-year period after the vendor allegedly did not live up to the terms of an agreement that had been worked out after it illegally shipped telecom equipment to Iran and North Korea. In early May, ZTE said it had ceased its major operating activities due to the export ban imposed by the US government.

Earlier this month, Trump had instructed the U.S Department of Commerce to find a solution to this conflict. Commerce Secretary Wilbur Ross said that he was considering alternative punishments for ZTE

The ban is also affecting a number of U.S firms including Google, Qualcomm, Acacia Communications and Dolby, which supply components, software and services to the Chinese vendor.

ZTE is estimating losses of at least CNY 20 billion ($3.1 billion) as a consequence of the ban, Bloomberg previously reported. ZTE is spending an estimated CNY 80 million to 100 million in daily operational expenses.


Juan Pedro Tomás
Juan Pedro Tomás
Juan Pedro covers Global Carriers and Global Enterprise IoT. Prior to RCR, Juan Pedro worked for Business News Americas, covering telecoms and IT news in the Latin American markets. He also worked for Telecompaper as their Regional Editor for Latin America and Asia/Pacific. Juan Pedro has also contributed to Latin Trade magazine as the publication's correspondent in Argentina and with political risk consultancy firm Exclusive Analysis, writing reports and providing political and economic information from certain Latin American markets. He has a degree in International Relations and a master in Journalism and is married with two kids.

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