US Issues Fourth Reprieve Of ZTE's Trade Restrictions

Earlier this year, the Chinese tech giant ZTE faced trouble in the United States after being hit with trade restrictions due to allegedly violating Washington's export regulations and delivering products to Iran. More specifically, the Shenzhen-based company faced sanctions on importing US-made products to its home country. In other words, any business in the world looking to export products manufactured in the US to ZTE first had to deal with the US Commerce Department in order to get an export license. As that license wasn't exactly obtainable in practice, these sanctions would be a significant hit to the company whose global operations heavily relied on US-made products manufactured by the likes of Microsoft, Dell, and Oracle. Would be, but still aren't, that is.

Namely, due to the sensitive and highly impactful nature of this decision, ZTE's representatives quickly managed to negotiate a temporary solution with the US authorities. More specifically, Washington agreed to grant the Chinese tech giant a temporary reprieve from the said trade restrictions as long as the Shenzhen-based firm fully cooperated with the ongoing investigation into the matter. While the initial relief was only valid until June 30th, it was subsequently extended to August 30th, after which the US authorities agreed to yet another reprieve lasting until November 28th. Today, ZTE announced that it has managed to negotiate another extension of the trade sanctions suspension. More specifically, the US Commerce Department has now agreed to a reprieve of restrictions until February 27th.

Cindy Lam, market analyst at the Hong Kong-based research firm UOB Kay Hian, told Reuters that there's a good chance this will be the final suspension extension issued by Washington, adding that it's likely the trade restrictions will be permanently removed by early 2017. If that prediction turns out to be correct, that would mean ZTE managed to navigate through this crisis without facing any real sanctions.

However, it's still questionable whether that actually ends up happening as latest developments suggest the US may be coming down on Iran harder than ever once President-elect Trump takes office. Namely, the Iranian plutonium enrichment program that led to economic sanctions of the Middle Eastern country that ZTE allegedly violated is once again a topical subject these days after Trump suggested he'll negotiate stricter concessions from Teheran. In that scenario, it seems unlikely that the upcoming US administration will be willing to cut any slack to companies that were alleged to interfere with its foreign policy.

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Dominik Bosnjak

Head Editor
Dominik started at AndroidHeadlines in 2016 and is the Head Editor of the site today. He’s approaching his first full decade in the media industry, with his background being primarily in technology, gaming, and entertainment. These days, his focus is more on the political side of the tech game, as well as data privacy issues, with him looking at both of those through the prism of Android. Contact him at [email protected]