Date
20 June 2018
ZTE could be made to pay a large fine and undertake management changes, rather than suffer crippling US sanctions, Donald Trump proposed on Tuesday. Photo: Reuters
ZTE could be made to pay a large fine and undertake management changes, rather than suffer crippling US sanctions, Donald Trump proposed on Tuesday. Photo: Reuters

Trump proposes large fine, management changes for ZTE

US President Donald Trump on Tuesday floated a plan to fine ZTE and shake up its management as his administration considers rolling back more severe penalties that have crippled the Chinese telecoms firm, Reuters reports.

Speaking at the White House, Trump said US technology firms have been hurt by a Commerce Department decision that prohibits them from selling components to ZTE.

“They can pay a big price without necessarily damaging all of these American companies,” Trump said.

The US Commerce Department imposed sanctions on ZTE in April after determining that the Chinese firm had broken an agreement in relation to a ban on shipping goods and technology to Iran.

ZTE, China’s second largest telecoms equipment firm, shut down most of its production after the ruling was announced. 

Trump said on Tuesday that ZTE may instead face a fine of up to US$1.3 billion, new management and a new board of directors.

That drew a quick response from Republicans and Democrats in Congress.

Some 26 senators urged the administration in a letter to keep penalties in place for “serial and pre-meditated violators of US law, such as ZTE.”

According to Reuters sources, a proposed trade deal with China would lift a seven-year ban that prevents US chipmakers and other companies from selling components to ZTE.

In return, China will eliminate tariffs on US agriculture or agree to buy more farm products from the United States.

– Contact us at [email protected]

RC

EJI Weekly Newsletter

Please click here to unsubscribe