U.S. lifts crippling supplier ban on ZTE

2025-04-28 03:28:06admin

The U.S. Department of Commerce on Friday lifted a 7-year ban on Chinese smartphone manufacturer ZTE. The ban lasted only 3 months.

For those who may not have been following the saga that closely, it all started when the U.S. banned ZTE from importing phone parts from American companies back in April.

The supplier ban was in response to ZTE misleading the Commerce Department about violating U.S. sanctions with Iran and North Korea. Furthermore, the U.S. intelligence community as well as Congress warned of national security concerns involving ZTE products.

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However, shortly after the 7-year ban was announced, President Trump weighed in on the issue making clear his intent to work out a deal. A temporary ban lift was announced earlier this month.

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The ban was officially lifted by the Commerce Department on Friday. As part of the agreement to end the ban, ZTE deposited $400 million into a U.S. escrow account. As part of the deal, the money will be held to ensure the Chinese tech company complies with the U.S. terms for the ban lift. This latest payment is on top of the $1 billion penalty the company paid in June and the $892 million it paid last year as part of the original settlement.

While ZTE is back in business in the U.S., it’s also back with a new board of directors and new senior management as part of the ban-lifting deal. It also now operates in the shadow of a suspended ban. Still, that hasn't stopped investors from celebrating.

Shares of ZTE jumped 17 percent on Monday, just one business day after the ban was lifted. Under the terms of this new deal, if the U.S. discovers any new violations from ZTE, it can activate a harsher 10-year ban. Although the Chinese phone maker is better off this week than it was last week, its long-term outlook still remains uncertain.

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