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US and China reportedly agree on 'broad outline' to lift ZTE sales ban (Updated)

Update: President Trump said ZTE may have to pay a $1.3 million fine, but some believe the president has taken a soft stance.

Published onMay 23, 2018

zte logo

Update (05/23): Following news of the potential agreement between the U.S. and China to resolve ZTE’s current import ban, Donald Trump has said that ZTE could face a fine of up to $1.3 billion to lift the sanctions imposed on it.

According to the BBC, he also suggested the possibility of new management, a new board of directors, and requirements for purchases of U.S. made goods.

However, not everyone is happy with Trump’s stance, believing it’s too lenient. Republican Senator Marco Rubio said in a Tweet that the administration has “surrendered to China.”

If this is true, then administration has surrendered to #China on #ZTE Making changes to their board & a fine won’t stop them from spying & stealing from us. But this is too important to be over. We will begin working on veto-proof congressional action
— Marco Rubio (@marcorubio) May 22, 2018

Meanwhile, a group of 27 senators wrote an open letter that warned the administration “not to compromise lawful U.S. enforcement actions against serial and pre-meditated violators of U.S. law, such as ZTE.”

Original article (05/22): The U.S. and China have reportedly agreed on a “broad outline” to resolve Chinese mobile company ZTE’s troubles.

According to CNBC, the agreement would see the U.S. supply ban lifted against the company as well.

BREAKING: US and China agree on broad outline to resolve ZTE issue, which would include removing the US sales ban to keep it in business – Dow Jones
— CNBC Now (@CNBCnow) May 22, 2018

Reuters reported the new deal could include China removing import tariffs on U.S. agricultural products while also buying more of them. According to the Wall Street Journal, Beijing had offered to remove the tariffs.

The Journal added that the deal is still being hammered out and there’s no guarantee it would be finalized. According to the publication, ZTE may be required to pay “significant” fines and make changes to its executive team and board seats in exchange to the lifting of the ban.

The White House insists that the matter is an issue of law, rather than a bargaining chip in the trade spat between Washington and Beijing, a source told the publication.

News of the deal comes a few days after the U.S. House Appropriations Committee approved an amendment to uphold the supply ban against the Chinese brand.

Samsung could sell Exynos chips to more OEMs, including ZTE
A Samsung Exynos processor.

ZTE was slapped with a supply ban by the U.S. after it violated sanctions against Iran. The ban deprived the brand of key smartphone components, including mobile chips from U.S. chip designer Qualcomm.

The mobile manufacturer was also facing the loss of its Google Mobile Services (GMS) license. Google grants qualifying mobile brands a license to GMS, which is Google’s suite of popular apps and APIs that are preinstalled on millions of smartphones.

The Chinese manufacturer has already been feeling the pinch after the supply ban, having stopped “major operating activities” two weeks ago.

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