US, China near deal to remove sanctions on ZTE - Mobile World Live

US, China near deal to remove sanctions on ZTE

22 MAY 2018

The US and China are reported to have outlined the terms of a deal to drop harsh export sanctions imposed on ZTE, which effectively would put the vendor out of business.

As part of bilateral talks to reduce trade tensions, the two sides are working out details of a plan which would see the US remove a ban on domestic companies selling components and software to ZTE. In return, the vendor would be required to make significant changes to its management and board, and face the prospect of hefty additional fines, The Wall Street Journal (WSJ) reported.

The Chinese government offered to remove tariffs on billions of dollars of US farm products, WSJ added.

A source told the newspaper: “The White House was meticulous in affirming that the case is a law enforcement matter and not a bargaining chip in negotiations.” Any steps to ease the sanctions will need to pass US national security reviews, WSJ reported.

The import ban was imposed by the Department of Commerce (DoC) after ZTE apparently failed to adhere to the terms of a March 2017 settlement in a case relating to violations of trade sanctions covering Iran.

US President Donald Trump subsequently weighed in, ordering the DoC to overturn the ban. However he faced a significant Congressional backlash, with politicians instead pushing for tighter restrictions on the Chinese vendor on perceived national security concerns.

In addition, members of the US House Appropriations Committee last week approved an amendment to the fiscal year 2019 Commerce, Justice [and] Science Appropriations bill preventing use of federal funds to contravene the block on ZTE.

Reuters previously reported ZTE imported $2.3 billion worth of US components from 211 suppliers in 2017.

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Joseph Waring

Joseph Waring joins Mobile World Live as the Asia editor for its new Asia channel. Before joining the GSMA, Joseph was group editor for Telecom Asia for more than ten years. In addition to writing features, news and blogs, he...

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