Economy

Donald Trump's China ban may have just claimed its first big victim

Donald Trump's China ban may have just claimed its first big victim

However, last month, the government brought the ban on U.S-produced parts due to ZTE's violation of their settlement terms and making false statements repeatedly.

ZTE denies it did not take adequate corrective action.

The company had immediately halted nearly all of its operations both overseas and at home after the denial order came into effect on April 15, because the ban, which could be interpreted as touching wide-ranging aspects of the company's operations, according to people familiar with the company's operations.

According to experts, ZTE may become the first victim of the "new cold war" between China and the United States, the article says the New York Times.

But in light of the ongoing trade war between the U.S. and China, the Trump administration may not back down so easily, which would threaten ZTE's ongoing existence. The ban was put in place because ZTE allegedly broke trade sanctions against Iran and North Korea.

The company said on Sunday it had submitted a request to the USA commerce department for a stay of the export ban, along with supplemental information. ZTE denies the claim.

Because ZTE makes a lot of the products using components from Qualcomm and Intel, a ban on United States companies supplying them is a huge hit.

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"They've stopped production of all products that have chips in them", said Zhao, the buyer, who declined to give his full name, adding that if production completely stopped for a year, "all ZTE's gear will become scrap".

Those efforts so far appear to be unsuccessful. This move comes in the aftermath of a USA ban placed on the company.

The UK government also revealed it was uncertain about ZTE shortly after, with the NCSC issuing a warning to UK telcos urging them not to use ZTE equipment. The Chinese OEM said in its exchange filings that their major operating activities have been halted after the enforcement of the Denial Order.

Most of ZTE's phones use processors from Qualcomm, which is based in San Diego.

In a recent earnings call, Acacia executives said the company had to write off $7.1 million in inventory that was slated for ZTE.

Corning said it's not expecting any "material impact" on its business.

Last month the U.S. government banned American companies from doing business with the Chinese smartphone maker after it failed to punish employees who breached sanctions against Iran. While Apple and Samsung have cornered the high-end market, ZTE makes relatively low-cost smart devices that have grown in popularity, Fieldhack added.


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