Date
17 October 2018
ZTE may pay a US$1.3 billion fine and shake up the firm's management under a deal reportedly being negotiated by US authorities. Photo: Bloomberg
ZTE may pay a US$1.3 billion fine and shake up the firm's management under a deal reportedly being negotiated by US authorities. Photo: Bloomberg

US reaches deal to keep ZTE in business: report

The Trump administration has informed US lawmakers that it has reached a deal to put Chinese telecoms equipment maker ZTE back in business, Reuters reports, citing an unidentified senior congressional aide.

The deal requires ZTE to pay a substantial fine, place US compliance officers at the company and change its management team, the source was quoted as saying on Friday.

When ZTE complies with the order, the US Commerce Department will lift an order issued in April preventing the Chinese firm from buying US products.

President Donald Trump appeared to confirm the deal in a tweet late on Friday.

“I closed it down then let it reopen with high level security guarantees, change of management and board, must purchase U.S. parts and pay a $1.3 Billion fine,” he wrote.

The reported deal involving China’s second-largest telecoms equipment maker ran into immediate resistance in Congress, where Democrats and Trump’s fellow Republicans accused him of bending to pressure from Beijing, Reuters said.

ZTE was banned in April from buying US technology components for seven years for breaking an agreement reached after it violated American sanctions against Iran and North Korea.

After ZTE makes a series of changes it would now be allowed to resume business with US companies, including chipmaker Qualcomm, according to the report.

ZTE is believed to have lost over US$3 billion since the April 15 ban on doing business with US suppliers, according to a Reuters source.

Responding to news of the administration’s deal with ZTE, Republican Senator Marco Rubio tweeted: “Yes they have a deal in mind. It is a great deal … for #ZTE & China. #China crushes U.S. companies with no mercy & they use these telecom companies to spy & steal from us.”

Rubio, as well as Democratic Senators Chuck Schumer and Chris Van Hollen, said Congress should act to stop Trump from letting ZTE get back into business.

“If the administration goes through with this reported deal, President Trump would be helping make China great again,” Schumer said Friday on Twitter. “Both parties in Congress should come together to stop this deal in its tracks.”

US intelligence and law enforcement agencies have serious concerns that ZTE and other Chinese telecommunications firms use their equipment to gather intelligence on US citizens.

The Chinese firms reject such allegations.

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RC

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