China and the US are going through a tough time regarding the disagreements in trade. The US had put a ban on the phone maker company of China, ZTE. This ban restricted it from accessing the US companies for the parts. The ban was installed as ZTE had violated the settlement of the sanction.
However, the Commerce Secretary, Wilbur Ross has cleared the cloud surrounding the same and has declared that the US has settled an agreement with ZTE, the Chinese firm. As per the deal, the ban on the company will be lifted that was instated in order to restrict it from accomplishing any transaction from the US suppliers and buying any parts. However, it will need ZTE to pay a penalty worth $1 billion and also recruit a team of professionals chosen by the US to handle the compliance. Along with it, the US has also demanded to replace the board of management within the span of a month.
The operations of the company have been tampered in a huge way due to the ban from the US. After Ross declared the same, Xi Jinping, the Chinese President had requested the US to reconsider the penalty and the other punishments.
As per Ross, this amount of the penalty is the highest amount ever put on any company as a fine by Commerce’s Bureau of Industry and Security.
As per the fresh deal, ZTE will also have to pay a sum of $100 million against a holding account in order to ensure the future violations.
Some of the Republicans believe the fourth-largest mobile manufacturer in China to be a risk in the national security. Hence, has criticized the decision taken by the government.
On the broader note, the negotiation will not affect the trade talks between China and the US regarding the proposed tariff of up to 25%.