(FinancialPress) — Chinese smartphone manufacturer ZTE has stuck a deal with the Trump administration. The Asian company will pay a hefty $1 billion fine and allow a US monitoring team to be part of their dealings in order to end the damaging trade dispute it had found itself embroiled.
US Commerce Secretary Wilbur Ross revealed the details of the deal. The agreement brings an end to a ban that prevented ZTE to acquire technology from US companies. The continuity hinges on the device maker‘s compliance to the presented terms.
The Secretary told press the deal was reached at the break of dawn on Thursday. It will comprise the most strict compliance that we’ve ever had on any company, American or foreign.” In addition to the fine, ZTE will have $400 million held in an escrow account.
Finally, all of ZTE‘s management and board will be replaced. The new management will receive reports from the on-site monitoring team.
The dispute‘s history
The US Commerce Department first enacted the aforementioned ban on April of 2018. It blocked American companies from providing parts or services to ZTE.
The reason behind the ban was ZTE‘s lack of compliance with Washington‘s sanctions on Iran and North Korea.
Secretry Ross said on the issue: “Prior administrations have been real patsies for the Chinese and for other countries. They’ve never really pushed back. So I think the Chinese are well aware there’s a new marshal in town and it’s called Donald J. Trump, and he’s a very, very good shot.”
The deal did not please everyone. Senator Chuck Schumer was irate by the decision, saying that President Trump is “shooting blanks“ at China while he levies hefty tariffs on historical partners such as Europe and Canada. ‘
“There is absolutely no good reason that ZTE should get a second chance, and this decision marks a 180-degree turn away from the president’s promise to be tough on China,” said Schumer in a statement.
ZTE didn‘t respond to a request for comment.