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Published: Mon, May 14, 2018
Economy | By Melissa Porter

Trump Extends Lifeline to Sanctioned Tech Company ZTE

Trump Extends Lifeline to Sanctioned Tech Company ZTE

He posted that he is working with China's president Xi Jinping to help save ZTE.

In April, the Commerce Department penalized ZTE for violating a settlement with the US government over illegal shipments to Iran and North Korea.

The U.S. ban has additionally been interpreted as a possible salvo in the burgeoning trade war between the Trump administration and China, and through that lens, the action may have given the U.S. leverage in trade negotiations.

Several U.S. intelligence agencies have warned against buying ZTE and Huawei phones. It has 75,000 employees and says it has business in more than 160 nations.

U.S. President Donald Trump pledged on Sunday to help ZTE Corp "get back into business, fast" after a U.S. ban crippled the Chinese technology company, offering a job-saving concession to Beijing ahead of high-stakes trade talks this week.

Qualcomm last month said it expected lost sales to ZTE to lower its earnings by 3 cents per share in the current quarter.

"ZTE misled the Department of Commerce", Mr Ross said.

Count President Donald Trump as one of Chinese phone maker ZTE's new allies. However, the company's phones used hardware and software from the U.S., which had a trade embargo with Iran. The company agreed in a plea deal to pay as much as $1.2 million in fines, fire four senior employees, and discipline 35 others - though it never did the latter.

The Commerce Department followed-up last month with additional penalties against ZTE for reportedly lying to federal regulators and engaging in an "extensive conspiracy" to cover-up its business dealings with North Korea and Iran.

ZTE relies on US companies such as Qualcomm Inc, Intel Corp and Alphabet Inc's Google.

Trump has repeatedly blasted China for what he calls unfair trade practices.

However, other parts of the US government, especially its intelligence agencies, have other issues with ZTE.

The Wall Street Journal noted Saturday that Chinese officials had raised the issue with a US trade delegation last week. Schumer tweeted in response to Trump's earlier tweet on the matter. It "goes against the steady stream of security warnings about ZTE", he added. "ZTE made false statements to the U.S. Government when they were originally caught and put on the Entity List, made false statements during the reprieve it was given, and made false statements again during its probation".

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