US Won't Lift Ban on Chinese Telecom
ZTE Until $1B Fine Paid
June 12, 2018
The United States will not lift the ban on doing business with Chinese
telecommunications giant ZTE until ZTE pays a $1 billion fine for trade
violations and places $400 million more in escrow.
The U.S. Commerce Department released details of its settlement it made
with ZTE, under President Trump's orders, to let the crippled company
get back in business again.
"Today, BIS (Bureau of Industry and Security) is imposing the largest
penalty it has ever levied and requiring ZTE adopt unprecedented
compliance measures," U.S. Commerce Secretary Wilbur Ross said Monday.
The White House has already threatened that ZTE will be shut down again
if it engages in just one more bad activity.
Last week, the Chinese company agreed to the $1 billion fine for putting
U.S. built components in its telecommunications products and selling
those goods to countries under a U.S. trade embargo, including Iran and
The Commerce Department cut off exports to ZTE, practically putting the
company out of business.
As part of its settlement with the U.S., ZTE agreed to put another $400
million in escrow, and replace its entire management and board by the
middle of July.
In exchange, the United States said it would lift sanctions against the
company and allow U.S. suppliers to again do business with the Chinese
of the world first heard of the dispute over ZTE nearly a month ago
after one of President Trump's tweets.
“President Xi of China and I are working together to give massive
Chinese phone company, ZTE, a way to get back into business, fast. Too
many jobs in China lost. Commerce Department has been instructed to get
it done!” Trump said.
Republican and Democratic lawmakers balked at Trump's efforts, calling
ZTE's trade with North Korea and Iran a violation of U.S. national
They were also perplexed by Trump's concern over Chinese jobs when he
has long accused China of stealing U.S. manufacturing jobs.