Less than a month ago, the Trump administration imposed a seven-year export ban on ZTE, China’s number two smartphone maker. The company was caught by U.S. officials covertly sending telecommunications equipment with American-made components to Iran and North Korea, a direct violation of U.S. export restrictions.
According to the Trump administration, ZTE employed several strategies to conceal the true their role in transactions that moved US-made technology to Iran and North Korea. “As a result of the conspiracy, ZTE was able to obtain hundreds of millions of dollars in contracts with and sales from Iranian entities to ship routers, microprocessors, and servers,” that were subject to US export restrictions.
In compensation, ZTE made a deal with the Trump administration to pay $890 million in fines. However U.S. officials found out that ZTE didn’t keep their commitment, and gave the penalized officials bonuses for the year 2016, which led to the seven-year ban.
Recently, President Trump seemed change his mind on the matter. He posted a tweet stating, “President Xi of China and I are working together to give massive Chinese phone company ZTE a way to get back into business fast. Too many jobs in China lost. Commerce Department has been instructed to get it done!”
In return, China praised President Trump for his offer to excuse ZTE from the US technology ban ahead of high-level trade talks this week.
“We highly commend the positive remark from the US on the ZTE issue and now we are communicating with the US side on the details,” said Chinese Foreign Ministry spokesman Lu Kang.
Trumps announcement is timed with the visit of China’s top economic official Liu He to the US in an attempt to reopen the discussion and fate of ZTE.
“Vice Premier Liu He will visit the US from May 15 to May 19 to continue consultations with the US economic team on Sino-US economic and trade issues,” Lu said, confirming the dates of the previously announced trip. “The two sides will work together to ensure a positive and constructive outcome during the upcoming consultations.”