The United States will not lift the ban on doing business with Chinese telecommunications giant ZTE until ZTE pays a $1 billion fine for trade violations and places $400 million more in escrow.
The U.S. Commerce Department released details of its settlement it made with ZTE, under President Trump’s orders, to let the crippled company get back in business again.
“Today, BIS (Bureau of Industry and Security) is imposing the largest penalty it has ever levied and requiring ZTE adopt unprecedented compliance measures,” U.S. Commerce Secretary Wilbur Ross said Monday.
The White House has already threatened that ZTE will be shut down again if it engages in just one more bad activity.
Last week, the Chinese company agreed to the $1 billion fine for putting U.S. built components in its telecommunications products and selling those goods to countries under a U.S. trade embargo, including Iran and North Korea.
The Commerce Department cut off exports to ZTE, practically putting the company out of business.
As part of its settlement with the U.S., ZTE agreed to put another $400 million in escrow, and replace its entire management and board by the middle of July.
In exchange, the United States said it would lift sanctions against the company and allow U.S. suppliers to again do business with the Chinese firm.
Most of the world first heard of the dispute over ZTE nearly a month ago after one of President Trump’s tweets.
“President Xi of China and I are working together to give massive Chinese phone company, ZTE, a way to get back into business, fast. Too many jobs in China lost. Commerce Department has been instructed to get it done!” Trump said.
Republican and Democratic lawmakers balked at Trump’s efforts, calling ZTE’s trade with North Korea and Iran a violation of U.S. national security.
They were also perplexed by Trump’s concern over Chinese jobs when he has long accused China of stealing U.S. manufacturing jobs.