Commerce Secretary: US reaches deal with China's ZTE

ZTE agrees to US demands

The US reached a deal to allow ZTE Corp to get back in business after the Chinese telecommunications company pays a record-large fine and agrees to management changes, eliminating a key sticking point as the two countries try to avert a trade war.

According to the Hong Kong-based English-language daily, "The reprimand and forfeiture of bonuses were part of the original settlement that ZTE had reached with the United States government". The U.S.is maintaining its 10-year export ban on ZTE, but the ban is indefinitely suspended and is likely to remain suspended if ZTE complies with the U.S. trade laws.

Commerce Secretary Wilbur Ross on Thursday announced a deal with Chinese telecommunications company ZTE that includes a $1 billion fine - a move that may indicate progress in high-stakes trade talks between the USA and China. Apparently, the USA is fining ZTE to the tune of $1 billion with $400 million in escrow on top of that to cover future violations.

Ross said today the penalty is the largest the Commerce Department has ever levied.

ZTE, headquartered in the southern city of Shenzhen, declined to comment on the report. The company already has a US court-appointed monitor.

ZTE ceased major operations in April after a seven-year ban was imposed on the company for breaking a 2017 agreement that was reached after it was caught illegally shipping goods to Iran and North Korea.

Ross, speaking about the agreement on CNBC on Thursday, said he did not think the arrangement would have any effect on tariff talks with China. Trump has countered that US companies were also hurt by the ban because they could no longer sell parts to the firm. The decision to embed a USA -appointed compliance team is potentially more stringent than the management purge Trump initially floated.

ZTE, which sources up to 30 per cent of its components from the United States, paused its operations as a result and claimed its survival was at risk.

Commerce Secretary Wilbur Ross announced a deal with Chinese telecommunications company ZTE amid U.S.

Chinese anti-monopoly regulators have withheld approval of Qualcomm Inc.'s proposed acquisition of NXP Semiconductors, which some commentators say is being used as leverage against Washington.

US goods exported to China past year totaled $130 billion while Chinese imports to the USA totaled $506 billion.

"At about 6 a.m. this morning, we executed a definitive agreement with ZTE". "I hope that we can devote ourselves to hard work and innovation and get the company back into business as soon as possible".

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