Trump Administration Strikes Lifeline Deal With China's ZTE

The Trump administration struck a lifeline deal with China's technology giant ZTE meant to save the company from bankruptcy that is threatening it following an April ban on purchasing American hardware and software, The New York Times reports, citing a source familiar with the development. The federal government already informed stateside lawmakers of the development, the same insider claims. Instead of being prevented from purchasing Qualcomm's chips and licensing an up-to-date version of Google's Android operating system over the next seven years, among other things, ZTE agreed to pay a major fine, make changes to its management team, and hire American compliance officers who will ensure the company's importing practices aren't in violations of any U.S. trade bans such as the ones imposed on North Korea and Iran which started the entire ordeal back in 2016.

The Commerce Department's denial order will be lifted simultaneously with ZTE implementing those concessions, as per the same report. The official confirmation of the deal is said to be arriving shortly and may even be made by the end of the day. The White House and President Trump personally pushed for the federal regulator to ease its sanctions on ZTE as a precursor to Washington's trade negotiations with Beijing whose first round was held in the U.S. capital last week. In exchange, China may accelerate its antitrust review of San Diego-based Qualcomm's attempted acquisition of NXP Semiconductors valued at some $44 billion which has been dragging on since late 2016.

The development may prompt significant backlash from Capitol Hill, especially in light of a recent bipartisan legislative effort to prevent easing ZTE's punishment. The Commerce Department previously said ZTE failed to fully comply with its 2017 settlement over the aforementioned trade sanction violations and has paid out annual bonuses to 35 employees it agreed to discipline, in addition to accusing the company of repeatedly lying to federal investigators. ZTE argued the issue has been overblown, accidental, and self-reported to the agency after the firm's management learned of its existence, calling the seven-year denial order unfair and "unacceptable." President Trump's willingness to push for softer sanctions on ZTE drew criticism from both sides of the stateside political spectrum, with Florida Senator Marco Rubio being one of the most high-profile Republicans who came out in opposition to that approach.

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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]
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