Chinese Tech Giant ZTE Closes: What Does This Mean For US Consumers?

ZTE Business Operations Grind to a Halt Due to US Export Ban

Chinese company ZTE stops business operations after US ban

Chinese telecommunications company ZTE has stopped major business operations, it has revealed, as a effect on the United States ban on selling components to the maker.

"As a result of the Denial Order, the major operating activities of the company have ceased", the company wrote in an exchange filing spotted by Reuters. In response, the US Department of Commerce banned US firms from supplying tech and parts to the company until 2025, according to the New York Times. ZTE stated that the company has enough cash on hand to fulfill its current "commercial obligations" and that it is "actively communicating" with the United States in hopes of reversing the denial order.

The Chinese firm is greatly dependent on US chips imports and the ban on sales hampers the smartphone business. The ban was implemented after ZTE was discovered to have violated a 2017 settlement regarding the evasion of U.S. sanctions against North Korea and Iran.

Last month, the Department of Commerce officially instated the ban, alleging that ZTE had violated the terms of the sanction case.

Selected Telstra-branded mobile devices now unavailable: Due to issues outside of our control, certain Telstra-branded mobile phones and mobile broadband devices made by ZTE are now unavailable.

-China trade war. The Chinese government raised the issue of ZTE last week with a visiting US trade delegation.

According to Reuters, ZTE has halted all main business operations due to the ban. The Chinese government raised the issue of ZTE last week with a visiting US Trade Delegation.

ZTE was accused by the U.S. Department of Commerce of illegally shipping U.S. equipment to Iran and North Korea.

The possibility of losing access to critical USA components has led to a great research and development push in China in recent years, as companies race to devise homegrown alternatives; suppliers in Japan and South Korea lack the capacity to provide all the components China needs.

The actions include a committee focusing in compliance, which is overseen by ZTE's CEO and experts in the matter, along with additional training for staff. ZTE said it has learned from, "past experiences on export control compliance". Unlike many online publications, we don't have a paywall or run banner advertising, because we want to keep our journalism open, without influence or the need to chase traffic.

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