Bloomberg reported that another lifeline has been handed over by the Trump administration to ZTE, allowing the company to resume specific business activities while US legislators decide how to deal with the company in moving forward. The US Commerce Department banned ZTE in April from working with U.S companies due to the company shipped US-made parts to Iran and North Korea. The company also violated the U.S trade sanctions, and then lied regarding giving the executives involved with those deals large bonuses. The Trump administration is now looking to offer ZTE a suspension, some members of the U.S Congress would like to see specific sanctions. Both sides should try to work that out, ZTE will be allowed to keep providing some certain services.
After the ban of 7-years, it was put into place, ZTE also stopped manufacturing its products. It was due to most of the company’s phones use U.S-produced Qualcomm processors. The ban put it at a production impasse and severely threatened its future. The U.S Commerce Department announced in June that the U.S had made a deal with ZTE and agreed to lift the ban as long as the company paid a $1 billion penalty. They should install an entirely new set of directors and embedded a U.S-selected compliance department. But, a number of U.S legislators weren’t satisfied regarding the arrangement and added language to the National Defense Authorization Act bill in the U.S Senate that would reinstate sanctions against ZTE. The concern of U.S lawmaker stems from a belief that ZTE can share information with the Chinese government and poses a security risk to the US.