Commerce Secretary Wilbur Ross said Thursday that the Trump administration has a struck a deal with Chinese telecom giant ZTE.
New deal: Wilbur Ross, the United States commerce secretary, told CNBC that the agreement calls for ZTE to pay a $1 billion fine for violating trade agreements by dealing with Iran and North Korea. That settlement also reportedly doesn't include the $361 million ZTE already paid to the Commerce Department.
The crippling ban was put in place after Washington said ZTE violated a 2017 deal in which the Chinese company admitted to evading sanctions on Iran and North Korea.
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The commerce secretary said he did not think the settlement of the ZTE dispute would have any impact on ongoing contentious trade and tariff talks between the USA and China, the world's two biggest economies.
The new deal will also see ZTE paying $400m into a holding account to insure against future violations. This brings the total penalties against ZTE to $2.29 billion, including the $400 million which will be placed in escrow.
"By letting ZTE off the hook, the president who roared like a lion is governing like a lamb when it comes to China", US Senate Democratic leader Chuck Schumer said in a statement in response to Reuters' report of the preliminary agreement.
Trump previously highlighted the fact that ZTE buys a tremendous amount of equipment from American companies and claimed an agreement to revive the company would be just a small component of an overall trade deal with China. Their function will be to monitor on a real-time basis ZTE's compliance with USA export control laws. We will closely monitor ZTE's behavior. The U.S. responded to this information with a denial order which made it illegal for U.S. companies to do business with ZTE. ZTE will have to welcome a team of "special compliance coordinators" for a period of 10 years to ensure that it is adhering to the terms of the new agreement. Qualcomm and Intel count ZTE as a customer, as do smaller component makers Oclaro and Acacia, both of which saw their stock prices drop sharply when the ZTE export ban was announced.
"At about 6 a.m. this morning, we executed a definitive agreement with ZTE". It was reported that last month T-Mobile was going to walk away from an agreement worth more than $1 billion to distribute ZTE smartphones, among other products, in the U.S.