ZTE gets a lifeline and is back in business with U.S. ban lifted

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The United States slapped a ban on China’s 2nd largest telecom, ZTE, for shipping devices to Iran and North Korea. The reason for the ban was that ZTE devices use chipsets from Qualcomm and Intel which are U.S. companies. Selling devices in Iran violated the sanctions placed against those countries, therefore, the company was found in violation. The seven-year ban meant the company could not purchase much needed American made electronics to make their devices.

While the future looked bleak for the company, one unlikely ally appeared to try and get them back on track, U.S. President Donald Trump.

The deal, communicated to officials on Capitol Hill by the Commerce Department, requires ZTE to pay a substantial fine, place U.S. compliance officers at the company and change its management team, the aide said. The Commerce Department would then lift an order preventing ZTE from buying U.S. products.

ZTE needs U.S. components for its mobile phones and network equipment. U.S. companies provide an estimated 25 percent to 30 percent of components in ZTE’s equipment.

Trump’s proposal earlier in the week ran into resistance in U.S. Congress, where Democrats and Trump’s fellow Republicans accused the president of bending to pressure from Beijing to ease up on a company that has admitted to violating sanctions on Iran.

So the telecom giant is back in safe waters, although they will have to jump through some hoops to maintain that position.

What do you think of this situation? Let us know in the comments below or on Google+, Twitter, or Facebook.

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