Trade war chess game sees President Trump instructing U.S. Commerce Department to modify ZTE component sales ban
SAN FRANCISCO — The U.S. Commerce Dept. is exploring options for modifying a ban on component suppliers exporting to ZTE that threatened to put the Chinese telecom giant out of business.
U.S. President Donald Trump asked Commerce Dept. Secretary Wilbur Ross to explore "alternative remedies" to punish ZTE for violating the terms of a settlement agreement and shipping equipment with U.S. components to Iran and North Korea.
ZTE said last week that it had effectively ceased operations after the U.S. ban, which prohibits U.S. component suppliers from selling to ZTE. An estimated 25 to 30 percent of the components in ZTE equipment including smartphones and networking equipment are sold by U.S. companies.
ZTE is a key customer to several U.S. chip suppliers, including Qualcomm. The San Diego-based chip supplier won't disclose how much business it does with ZTE on an annual basis, but some estimates put Qualcomm chip sales to ZTE in the neighborhood of $500 million per year.
The Reuters news service reported Monday (May 14) that Trump said his intervention in the matter is related to a trade war standoff that has China and the U.S. poised to impose steep tariffs on products made by the other side.
In a tweet sent over the weekend, Trump said that he had instructed the Commerce Dept. to "get it done" — meaning find another remedy to punish ZTE for violating the terms of its agreement — and get ZTE back in business to prevent major jobs losses in China.
— Dylan McGrath is the editor-in-chief of EE Times.