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China Requests US to Dial Back ZTE's Punishment

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May 4, 2018, 7:34 AM   by Eric M. Zeman   @zeman_e

China hopes he U.S. will have a change of heart and alter the seven-year ban it imposed against ZTE. Senior officials from both countries met in China on Friday, says Reuters, to discuss this and other trade matters. Last month, the U.S. Department of Commerce slapped ZTE hard by banning U.S. companies from selling the Chinese phone maker parts or software for a period of seven years. This includes processors and operating systems such as Android. The ban was imposed because ZTE broke an earlier agreement it made after it was caught exporting gear to Iran. The punishment is severe enough that it threatens to destroy ZTE's phone business entirely. ZTE called the ban unacceptable. Reuters' sources say the Chinese representatives asked the U.S. reps to listen to ZTE's appeal and consider the steps the company has taken to address the matter. China’s Ministry of Commerce confirmed that the U.S. officials took the matter seriously and they promised to discuss the matter with President Trump. U.S. officials insist ZTE's punishment is not related to broader international trade policies, but there's no question the U.S. has ramped up action against Chinese phone firms. Members of the government have pushed hard against Huawei, which saw distribution deals with AT&T and Verizon Wireless evaporate in January. Earlier this week, the Pentagon banned base exchanges from selling Huawei and ZTE phones. Some members of the government are pushing to make it illegal for government employees to own or use a Huawei phone for work purposes. It's unclear what impact China's request concerning ZTE will have in the long run.

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