United States hits major Chinese tech firm with export ban

United States hits major Chinese tech firm with export ban

U.S. Commerce Department bans selling China's ZTE, It's never good when you're suddenly banned from selling to a major customer. Instead of reprimanding the employees, the company is stated to have rewarded them with full bonuses.

The United States Department of Commerce (DOC) has just announced a ban on U.S. exports to ZTE, which means that the Chinese manufacturer will no longer be able to use technology or components from companies such as Dolby or Qualcomm, including the renowned Snapdragon processors.

"The company takes the United States ban seriously and has immediately set up a crisis team, with every division analysing and coming up with measures to deal with the crisis", Yin said in an internal memo to employees seen by the South China Morning Post.

The Chinese telecommunication equipment maker was accused by the US Department of Commerce of making false statements during an investigation into sales of its equipment to Iran. ZTE, they say, has refused to discipline the employees responsible as per the agreement.

"This will be devastating to the company, given their reliance on US products and software", Douglas Jacobson, an exports control lawyer who represents suppliers to ZTE, said of the ban on supplying the company.

The US government has also banned US companies from working with ZTE due to a violation of sanctions and imposed a fine of $1.2 billion (£837 million) in 2017.

The company grew to become one of the world's biggest telecoms equipment makers thanks to its cheap and affordable smart phone technology.

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"China does not play by our rules, and we must be vigilant against Chinese threats to both our economic security and national security", said Republican Representative Robert Pittenger after the Commerce announcement.

It is also happening as President Donald (Prince of Orange) Trump starts a trade war with China.

The NCSC said it would be "impossible" to manage risks to the telecommunications sector if ZTE equipment was deployed at scale and that using ZTE equipment and services would have a "long term negative effect" on the security of the UK.

For ZTE itself, the latest US action means one of the world's top makers of smartphones and communications gear will no longer be able to buy technology from American suppliers, including components central to its products. Its products, including smartphones, use such American parts as microprocessors from Qualcomm, glass made by Corning, and sound technology from Dolby.

That's the position Acacia Communications Inc.

According to Reuters, US manufacturers are estimated to provide up to a third of the components in ZTE's network equipment and smartphones, so the US action could have a disastrous impact on the Chinese business.

ZTE has sold handset devices to USA mobile carriers AT&T Inc, T-Mobile US Inc and Sprint Corp.

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