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Commerce Department May Relax ZTE's Punishment as Trump Defends Stance

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May 14, 2018, 4:42 PM   by Eric M. Zeman   @phonescooper

Wilbur Ross, the U.S. Secretary of Commerce, said his department is open to changing its ban impacting ZTE. The agency has forbid U.S. companies from selling hardware or software to ZTE for a period of seven years after the company was caught lying about an earlier settlement agreement. "ZTE did do some inappropriate things. They’ve admitted to that," said Ross speaking at a National Press Club event. "The question is: Are there alternative remedies to the one that we had originally put forward? And that’s the area we will be exploring very, very promptly." Ross didn't suggest how the Commerce Department might walk back its ban, which has effectively strangled ZTE's smartphone business. At the same time, President Donald Trump found himself defending his wish to help the company get back on its feet. "ZTE, the large Chinese phone company, buys a big percentage of individual parts from U.S. companies," said Trump via Twitter. ZTE's main U.S. supplier is Qualcomm, which sells the company processors and cellular modems. ZTE also licenses the Android operating system from Google. "This is also reflective of the larger trade deal we are negotiating with China and my personal relationship with President Xi [Jinping]." noted Trump. ZTE's 75,000 workers have been mostly idle since the ban was announced. Trump tweeted over the weekend that he wanted to help them get back to work. The Commerce Department insists its ban is just punishment for illegal behavior and not related to the on-going trade talks between the U.S. and China.

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