U.S. boycotts China telecom giant ZTE over Iran case
- Author: Megan Austin Apr 17, 2018,
Apr 17, 2018, 18:14
ZTE has been banned from buying components or parts from the US for seven years, after the US Commerce Department said the company violated the terms of a settlement reached last year with the US government, the Wall Street Journal reported.
The new restrictive policy from the U.S. Department of Commerce stems from 2017 charges exacted on ZTE, the telecommunications equipment corporation, for illegally shipping American goods to Iran and North Korea.
The company "covered up the fact that ZTE paid full bonuses to employees that had engaged in illegal conduct, and failed to issue letters of reprimand", the US Department of Commerce said. "This egregious behavior can not be ignored", US Secretary of Commerce Wilbur Ross said. That settlement included a provision that, should ZTE again be found to be skirting United States trade laws, a seven-year export ban would be imposed. Trump on Monday accused China along with Russian Federation of devaluing their currencies, opening a new front in his argument that foreign governments are exploiting the U.S.
Of course, with its avenue to some of the most sought after components closed off (for the time being), it's a given that ZTE will now have to source out its processors from non-US companies.
There is a high chance that ZTE Corp. will take a hit financially from the ban, as it has sold products to American phone companies AT&T Inc.
China telecoms firm ZTE Corp has been hit with a 7-year ban for a sanctions breach by the USA government.
"This will be devastating to the company, given their reliance on U.S. products and software", Reuters quoted him as saying.
Sensex rises 570 pts, Nifty above 10300 as RBI holds policy rates
The German DAX dropped 0.4 percent and France's CAC 40 index slid 0.2 percent while the U.K.'s FTSE 100 inched up 0.1 percent. At 9:20 am, Sensex was trading at 33,582, down 14 points, while the broader Nifty50 was ruling at 10,312, down 12 points.
The sales ban came on the same day that it was revealed that the UK's National Cyber Security Centre (NCSC) has warned telecoms companies and other network operators of its "security concerns" with networking hardware made by Chinese vendor ZTE.
"We are in a complicated worldwide situation", Yin said in an open letter circulated online, warning that the company faces "twists and turns" overseas.
On Monday (16 April), a senior USA commerce official told the FT: "The timing of this is somewhat unfortunate because it could make it seem like they are connected".
In conclusion, the measures taken by the United States government against the Chinese manufacturer will also reflect on the latter's smartphones production and their quality, subsequently, since now ZTE can't buy Qualcomm chipsets anymore, while, until now, up to 30% of the components used by ZTE were made by U.S. companies.
CICC predicted the Commerce ban will have a significant effect on ZTE's business - and perhaps on the building of wireless networks.
The Chinese yuan hit its strongest level against the U.S. dollar since the surprise devaluation of the currency in August 2015.