ZTE Signs Preliminary Agreement With Commerce Department To Lift US Ban

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The Commerce Department plans to amend its settlement agreement from a year ago and count the $US361 million ZTE paid as a part of that, allowing the U.S. to claim a total penalty of as much as $US1.7 billion, sources said.

Commerce Secretary Wilbur Ross on Thursday announced a deal with Chinese telecommunications company ZTE that includes a $1 billion fine - a move that may indicate progress in high-stakes trade talks between the US and China. A Commerce Department spokesman said that "no definitive agreement has been signed by both parties".

It would also ban the USA government from using grants or loans to subsidize Huawei, ZTE or any subsidiaries or affiliates. He countered by highlighting that ZTE "buys a big percentage of individual parts from United States companies" and saying the telecom giant's fate reflects the USA relationship with China.

Co-sponsors include Republican Senators Marco Rubio and Susan Collins, and Democrats Richard Blumenthal and Bill Nelson.

US Commerce Secretary Wilbur Ross, who is now in Beijing for trade talks with China and told CNBC that a deal worth $1.4 billion had been struck. Despite opposition in Congress, the DoC announced today that it reached a deal with ZTE to end sanctions.

"We still retain the power to shut them down again", Commerce Secretary Wilbur Ross said Thursday in an interview on CNBC.

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In April, Washington prohibited ZTE from buying parts from U.S. companies, including Qualcomm, Corning and Google. The company was allowed continued access to the USA market under the 2017 agreement.

Ross touted the deal as a victory, saying the administration's previous strict actions accomplished its goal in that it "brought ... a $17 billion company to its knees more or less put them out of business" and that the new agreement is "something I think even more effective". They raised national security concerns about ZTE, a view shared by USA intelligence agencies and other countries.

Senator Ron Wyden of OR, a Democrat and ranking member on the Finance Committee with jurisdiction over trade, and Senate Minority Leader Chuck Schumer of NY called on Congress to reverse the agreement. ZTE reached an agreement to turn over $1.19 billion and punish executives involved in the scheme, but in April the USA determined that the company hadn't lived up to its promises.

Trump argues that bilateral trade deficits reflect bad deals for the US that need to be rewritten.

US President Donald Trump met with his trade advisers on Tuesday to discuss China's offer to import an extra $70 billion of American goods over a year in hopes of defusing a potential trade war between the world's two largest economies.

Qualcomm Chief Executive Officer Steven Mollenkopf said on Thursday he hoped the ZTE agreement would pave the way for the NXP approval. Smaller makers of optical components, including Oclaro and Acacia, rely more heavily on ZTE's business.

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