Wilbur Ross Says U.S. and ZTE Have Reached an Agreement

  • Wilbur Ross Says U.S. and ZTE Have Reached an Agreement

Wilbur Ross Says U.S. and ZTE Have Reached an Agreement

For breaking an agreement that was put in place after it pleaded guilty to violating USA sanctions in 2017, the Department of Commerce banned all United States businesses from selling components to Chinese manufacturer ZTE for seven years in April.

Following the ban on selling USA -made hardware (and potentially software) to ZTE earlier this year, it appears that the company may have reached a compromise with the US government, according to Reuters.

The immediate ramifications of this deal are that although ZTE is becoming cash-poorer, this will allow them to resume day-to-day business operations and get the business moving again.

"The total deal is $1.4 billion".

"At about 6:00 A.M. this morning, we executed a definitive agreement with ZTE and that brings, that brings to a conclusion this phase of the developing with them", Ross said in an interview with CNBC.

USA companies could soon be cleared to do business with China's ZTE, according to Reuters. These were chips and components made in America that ZTE uses to make its radio equipment.

ZTE also did not immediately respond to requests for comment.

■ ZTE must also change its board of directors and executive team within 30 days.

The company paid $892 million in fines, with an additional $300 million suspended to encourage compliance with the settlement. USA officials reached a deal on June 7, 2018, to ease sanctions that threatened to cripple Chinese smartphone maker ZTE, Ross said.

US senators said they plan legislation to roll back the agreement.

US President Donald Trump met with his trade advisers on Tuesday to discuss China's offer to import an extra $70 billion of American goods over a year in hopes of defusing a potential trade war between the world's two largest economies.

"I think where we ended up on ZTE is in a better place", said Gutierrez, who has been critical of other Trump administration trade policies. "It's unprecedented to have U.S. agents as monitors ..."

"The hope is accommodating China's concerns on ZTE will open the door to favorable decisions on Qualcomm and other deals", said Altbach.

ZTE's survival has been a topic of discussion in high-level U.S. "Export control and sanctions laws should not be negotiable, because fidelity to the rule of law is a key part of what distinguishes the USA from a country like China that is ruled by a Communist dictatorship". Smaller makers of optical components, including Oclaro and Acacia, rely more heavily on ZTE's business.