U.S. Cuts Deal With Sanctioned Chinese Tech Company ZTE

China's ZTE said it ceased major operations last month due to the ban

ZTE, the fourth-largest smartphone maker in the USA by market share, "buys a big percentage of individual parts from USA companies". A Commerce Department spokesman said that "no definitive agreement has been signed by both parties".

The Commerce Department said Thursday that ZTE must also put $400 million in escrow - a sum that it would forfeit if it violated Thursday's agreement.

The deal exacts a $1 billion penalty from ZTE for its past sanctions violations, as well as $400 million held in escrow that will be forfeited to the U.S. should ZTE violate sanctions again.

"'We still retain the power to shut them down again", he said Thursday in an interview on CNBC. They were likely made harsher by current trade tensions sparked by President Donald Trump's tariffs on steel and aluminum, as well as pending tariffs on China.

The administration has insisted that talks with ZTE deal are separate from larger trade dispute between the USA and China, a position reiterated by Ross on Thursday.

Trump barged into the case last month by tweeting that he was working with President Xi Jinping to put ZTE "back in business, fast" and save tens of thousands of Chinese jobs.

ZTE has promised to replace its board and executive team as part of the deal.

The ban in effect nearly destroyed ZTE as it now relies on many components from American companies. Its global smartphone market share is about 11 percent, and its total revenue was about $92 billion in 2017.

Critics like senator Marco Rubio have criticized the Trump administration's willingness to cut a deal with ZTE, saying it undercuts United States national security.

A USA investigation into ZTE was launched after Reuters reported in 2012 the company had signed contracts to ship hardware and software worth millions of dollars to Iran from some of the best-known us technology companies.

The measure planned in the Senate would retroactively impose sanctions originally levied against ZTE, reversing the consent agreement signed on Thursday, Senate Democratic Leader Chuck Schumer said.

Shares in NXP Semiconductors NV rose 3.8 per cent in early trading in NY after news of the ZTE deal was announced. It agreed to pay $890 million in fines, dismiss four employees, and discipline 35 others by either denying them their bonuses or reprimanding them.

ZTE supplier Oclaro Inc was up 1.3 percent while Acacia Communications Inc was down 0.6 percent.

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