ZTE edges closer to the resumption of US business

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Chinese tech giant ZTE has signed an agreement with the clearing the way to resume business in the country.

Once ZTE makes $ 400 million (£303 million) security deposit, an order to lift the ban will be issued, the u.s. Commerce Department said.

ZTE was blocked from buying US parts in April, after the U.S. found that it violated the ban on trade with Iran and North Korea.

The movement comes from the united states-China trade war is on the rise.

“Once the ZTE has completed the $400 million escrow deposit, BIS will issue a notice of elevation of the denial of the order”, the Commerce Department said on Twitter, referring to the Bureau of Industry and Security.

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ZTE, China’s second largest manufacturer of telecommunications, it depends on US components for the production of their phones.

The ban forced the company to suspend operations, which led the President of China, Xi Jinping, to request reconsideration of the sanction.

In June, the united states came to an agreement with ZTE that will allow to resume full activities in the united states if they meet a series of requirements, such as: payment of $1bn worth, the recruitment of a team of compliance chosen by the united states, replacing much of its board of directors and the payment of $ 400 million in a holding account to ensure against future violations.

The Triumph of the management agreement with Beijing has been criticized by a bipartisan group of senators of the united states, which wants to see the ban kept in place of citing national security and other concerns.

“Allow ZTE to resume business is a direct betrayal of President of Trump promise to be difficult in China and protect American workers. The administration of the terrible ZTE deal will undermine our national and economic security,” US Senator Chuck Sumerian, said in a statement.

But the Department of Commerce of the united states defended the government’s position, saying that the agreement “represents the most harsh punishment and strict compliance of the scheme the Department has imposed in such a case.”

End of the post to Twitter by @CommerceGov

The ZTE saga comes at a time when US China relations are already very tense.

The united states government last week fired the opening shots of an outright trade war by placing tariffs on $34bn of Chinese products. Intensified the dispute this week the list of another $200 billion worth of Chinese products it plans to hit with rates as soon as September.

China, which has begun to fight back, said he was “shocked” by the US action, and has been accused of throwing the “largest trade war in economic history.”

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