US senators want ban on China's ZTE, despite Trump action

Ivan Schwartz
July 16, 2018

A couple of days ago we reported that ZTE's ban was set to be lifted and in some good news for them overnight the US Commerce Department have done just that, removing all bans in place on ZTE.

A photograph circulating among employees around midnight showed ZTE's new chief executive and 10 other managers each giving a thumbs-up to the news, which was flashed on a screen at the company, according to a person familiar with the matter.

The export ban forced ZTE (ZTCOF) to halt nearly all of its operations, putting the company's future in doubt.

And the Trump administration has yet to resolve other issues in its trade war with China.

U.S. President Donald Trump tweeted in May that he closed down ZTE and let it reopen, although no agreement had been reached.

ZTE, which makes smartphones and networking gear, signed an agreement with the United States on Thursday that paved the way for it to resume operations after a almost three-month ban on doing business with American suppliers.

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The punishment came after the company made false statements about disciplining 35 employees involved with violating us sanctions and illegally shipping USA -origin goods to Iran and North Korea, Commerce officials said.

"We write to express our strong support for measures. that would reinstate USA government penalties against ZTE, a Chinese state-directed telecommunications company, and modernize the Committee on Foreign Investment in the United States", the senators wrote in the letter, which was sent on Thursday.

The senators not only requests that the penalties be reinstated, but that the US henceforth prohibit all government and military personnel from "using or procuring equipment from, or entering into contracts with ZTE or Huawei", because of the potential espionage threat which the companies pose.

Since the White House agreed to lift the ban, the company's stock has soared, as have the shares of its US suppliers, including Qualcomm, Intel, Broadcom, and Texas Instruments.

ZTE has replaced its board of directors and senior management, as required by the June settlement, the Commerce Department noted. The current ban could have lasted seven years. Many U.S. lawmakers see the company as a national security threat.

ZTE was first hit with the ban in April after it violated the terms of 2017 agreement stipulating that it was not allowed to sell sensitive American technology to Iran and North Korea. Its fate is unclear.

Other reports by GizPress

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