ZTE announced the “major operating activities of the company have ceased” following a ban imposed by the US government, but added it is still working to find a resolution.
In a release, the Chinese vendor said the decision had been made as a result of a US government denial order issued in April, which bars US companies from selling components to ZTE for a period of seven years.
“As of now, the company maintains sufficient cash and strictly adheres to its commercial obligations subject to compliance with laws and regulations,” it stated.
“The company and related parties are actively communicating with the relevant US government departments in order to facilitate the modification or reversal of the Denial Order by the US government and forge a positive outcome in the development of the matters.”
ZTE said it would make additional announcements regarding the issue as “soon as practicable”.
In ceasing operations, Reuters reported the company appears to have suspended its online stores on its own website and on Alibaba’s e-commerce platform.
US toughens up
Last month, the US government said it was toughening up on ZTE by imposing restrictions on US companies from selling services and equipment to the vendor after ruling it made false statements during an investigation into violations of trade sanctions with Iran.
ZTE said it would fight the ban, but warned at the time the move could threaten its survival if it was upheld.
Last week, China appealed to the US government for an amendment to the block during trade talks and the case was expected to be heard by US President Donald Trump.
Indeed, the company faces broad reprucussions as a result of the US decision.
A significant impact will be felt on its handset business because it will be blocked from accessing key hardware from companies such as Qualcomm and potentially the use of Android software from Google.
The issue with ZTE comes amid an escalating row between the US and China, which is heading towards a possible trade war between the two superpowers.