There is currently a supposed deal between China and the US that could keep ZTE in business. These two countries seem to have reached an agreement to outline a deal, which settles trade disputes from when America was banned from selling ZTE’s due to violated sanctions involving both North Korea and Iran.
If this deal comes to fruition, the ban would be lifted by the United States. ZTE then would need to make leadership changes in several areas as well as facing possible fines, some of them very heavy. However, the survival of the business, which would be assured by this deal, is important to many companies. Qualcomm, for instance, is an American company that could see massive damage to its own business if ZTE shuts down. ZTE has been fourth in line as the largest mobile phone vendor in the United States.
As a part of the same deal, China is positioned to relieve tariffs that have made massive impacts on United States farm products, to the tune of billions of US dollars. The White House has been noted as stating that they are “meticulous in affirming that the case is a law enforcement matter and not a bargaining chip in negotiations.”
The deal itself is not really a big surprise. Earlier in May 2018, President Trump issued a Tweet that stated, “President Xi of China, and I, are working together to give massive Chinese phone company, ZTE, a way to get back into business, fast.” Lawmakers and officials alike bombarded the statement, saying that the current administration is going to soft on their negotiations with China in the area of trade. This coming after China demanded the roll back of US sanctions against ZTE as the very basis of any continued talks in the area of trade. Those negotiations came to a near stand still last month.
President Trump’s official Tweet, May 13, 2018, stated, “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!”
Larry Kudlow, economic advisor to the White House, state that ZTE is not going to be allowed to “get off scot-free”. He stated that the company will still face stiff fine and must comply with severe measures, including the election of new board of director members and a management team.