Tuesday, 19 June 2018

US and China close to finalising ZTE deal

By Chris Kelly, Total Telecom
Tuesday 22 May 18

ZTE has ceased manufacturing following a banning order implemented by the US, however, a deal to save the company now appears to be on the cards

The US and Chinese governments are close to agreeing a deal that would remove the newly implemented banning order on ZTE, according to industry sources. The ban currently prohibits ZTE from doing business with any American firm and has decimated the Chinese smartphone manufacturer's production line…

The US and Chinese governments are close to agreeing a deal that would remove the newly implemented banning order on ZTE, according to industry sources.

The ban currently prohibits ZTE from doing business with any American firm and has decimated the Chinese smartphone manufacturer's production line. ZTE halted production at its manufacturing plants earlier this month.

According to Reuters, two independent sources close to US-China negotiations have confirmed that a deal is imminent.

The removal of the banning order would mean that ZTE was free to purchase American made chipsets for use in the manufacture of its smartphones.

The deal to save ZTE is part of a broader package of reciprocal trade deals that are in the offing between China and the US, as relations between the two powerhouses begin to thaw.

China is believed to have agreed to purchase large amounts of farming and agricultural equipment from the US in return for a relaxing of the sanctions against ZTE.

Earlier today, President Trump Tweeted that China was set to buy "as much as [US] farmers can produce".

 

 

Tensions between the two countries escalated rapidly last month as the US fired a series of allegations at Chinese telecoms firms, siting national security concerns over ZTE. The Chinese government has appealed to the US to deescalate the situation and refrain from harming what it termed "mutually beneficial" trade agreements. Just as it seemed that ZTE was doomed, President Trump stepped in and extended an olive branch to the Chinese manufacturer.

The deal is expected to be signed next week, ahead of a meeting between US and Chinese delegates in Beijing.

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