Washington and Beijing have reached a deal to ease sanctions that brought Chinese smartphone maker ZTE to the brink of collapse, the US Commerce Department announced Thursday.
ZTE will pay a $1 billion penalty, and put another $400 million in escrow to cover possible future violations before being stricken from a sanctions list.
Trading Penalty
Commerce Secretary of US Wilbur Ross said that this is a pretty strict settlement. The strictest and largest settlement fine that has ever been brought by the Commerce Department against any violator of export controls till now. The ZTE deal was an enforcement matter that was unrelated to the trade talks, which he has led. But it came shortly after Chinese officials offered to buy an additional $70 billion in US goods to cut the trade deficit, moving toward meeting one of Trump’s central demands on trade.
Several US lawmakers have also warned against easing sanctions on ZTE, citing national security concerns.
Washington lawmakers were arrogant last month after Trump offered to rescue ZTE as a personal favor to Chinese President Xi Jinping—even though the company is widely considered a liability for US national cyber-security.
