The US Commerce Department has been working closely with ZTE to help lift the ban that was placed on the company a few months ago. ZTE was initially banned from doing business in the US and using US technologies for seven years. But the US government has been working with the company to right its wrongs and lift this ban. Now the US is one step closer to lifting the ban, as the Commerce Department has signed an escrow agreement, which means the last step is for ZTE to deposit a $400 million into an escrow account. Afterwards, the ban on ZTE in the US will be lifted, according to the Commerce Department, who spoke with Reuters.
This is all part of the $1.4 billion settlement that ZTE agreed on with the US Commerce Department back in June, to open its US business once again. This escrow account will give the US an additional $400 million if ZTE violates the settlement, the other $1 billion, ZTE paid to the US Treasury last month. After the ban is lifted, ZTE is expected to restart its operations in the US. ZTE has lost billions since it was banned in the US, particularly because it was not able to fulfill contracts with other companies due to the ban. ZTE, like Huawei and other companies, do more than just make smartphones. It also provides cellular network gear, and carriers were not able to get their gear in time due to this ban, and that forced a number of them to pull out of the contract and cost ZTE billions.
The issue with ZTE actually dates back to last year, when it was caught selling goods to Iran and North Korea with US tech inside. This is against the law in the US, due to the sanctions put on both countries. And it is a big part of the trade war currently going on between the US and China. So once this issue is resolved with ZTE and the US, the trade war might back down a bit. Currently, the Trump Administration is getting ready to tax around $200 billion worth of goods that China exports to the US.