In trouble with the U.S. Commerce Department, ZTE may have a lifeline… in President Trump

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If you’ve been following the news lately, there’s no doubt that you’ve heard of the woes ZTE has been facing with the U.S. Commerce Department. The second largest telecom maker in China, the company is facing a ban due after they were found to be shipping devices to Iran. As ZTE devices use U.S. made components such as Qualcomm and Intel chips, these shipments violate U.S. export restrictions.

As of last week, ZTE stated in an exchange filing that they were ceasing major operating activities.

“As a result of the Denial Order, the major operating activities of the company have ceased,” ZTE said in the exchange filings late on Wednesday. “As of now, the company maintains sufficient cash and strictly adheres to its commercial obligations subject in compliance with laws and regulations.”

Not only does ZTE manufacture smartphones but they also ship routers and other networking equipment worldwide. According to Reuters, the company has also suspended sales from their website as well as Taobao (an online Chinese e-commerce retailer). Of course, the decision puts projects like the recently announced ZTE gaming phone in limbo, although it’s unclear if the ban extends to their sub-brand nubia as the Indiegogo campaign is still currently live. The company has applied for a suspension of the ban to the U.S. Commerce Department and is hoping for a resolution. That resolution may come from a surprising ally  — President Donald Trump.

Given President Trump’s “America First” mantra, it is very curious to see him mentioning “too many jobs in China lost” over the ZTE ban. It is possible that the President is using ZTE as a bargaining chip with China but only time will tell, especially considering the U.S. government’s stance on other Chinese companies like Huawei. This isn’t the first time President Trump has thrown his weight around in the business arena as he quashed Broadcom’s hostile takeover attempt of Qualcomm earlier this year.

What do you think about the ban on ZTE and President Trump’s tweet which apparently throws the company a much needed lifeline? Let us know in the comments below or on Google+, Twitter, or Facebook.

[button link=”″ icon=”fa-external-link” side=”left” target=”blank” color=”285b5e” textcolor=”ffffff”]Source: Reuters[/button]

Last Updated on May 14, 2018.


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