The Wall Street Journal reports that Canadian authorities have arrested the CFO of Huawei — who is also the founder's daughter — at the request of U.S. authorities. The charge relates to alleged violations of U.S. sanctions on Iran. The U.S. government made a similar case against ZTE (Huawei and ZTE are both Chinese companies,) which at one point threatened ZTE's entire global business. The government has already pressured U.S. companies and allied governments to stop doing business with Huawei over spying concerns. This new action against Huawei will likely affect the current administration's on-again/off-again trade war with China. The executive, Meng Wanzhou, will be extradited to the U.S. and face a bail hearing on Friday.
ZTE has fallen into the U.S. government's crosshairs once again, this time thanks to its involvement with Venezuela. Earlier this month, Reuters reported that ZTE supplied Venezuela's state telecommunications firm with gear from Dell. The equipment helped Venezuela create a database that uses something called the "fatherland card" to track citizens' behavior. Data collected by the card and the Venezuelan government includes financial and medical history, social media use, political affiliation, and whether a person voted. Senators Chris Van Hollen (D) and Marco Rubio (R) plan to submit a letter to the U.S. secretaries of state, treasury, and commerce to determine if ZTE collaborated with people under U.S. sanction, whether the U.S. gear was used unlawfully, and whether ZTE helped Venezuela spy on its citizens. Hollen and Rubio are concerned that ZTE used Dell's equipment in the database. The senators want to know "whether ZTE violated U.S. export controls with respect to the installation of data storage units built by Dell." ZTE is effectively on parole with the U.S. government. In April, the U.S. accused ZTE of violating a previous settlement concerning illegal equipment sales to Iran and North Korea. The company paid a $1 billion fine after it slogged through a three-month ban on the use of U.S. hardware and software. Many Venezuelan government officials are under sanction by the U.S. for authoritative behavior and human rights violations. If ZTE did in fact sell Dell equipment to Venezuela's government that was then used to spy on the people of Venezuela, it's possible ZTE violated its agreement with the U.S. Dell said it has no record of a sale to ZTE. No parties from the Venezuelan government or from ZTE commented on Reuters' story.
ZTE is taking its first, cautious steps in staging a comeback in the U.S. market with two entry-level phones that can run on Sprint, Verizon, and GSM networks. The Blade Max View and Blade Max 2s (pictured) both cost under $200 and offer big screens and big batteries. Shared features between the two include 6-inch displays with full HD+ resolution, dual-band WiFi, Bluetooth 4.2, USB-C, memory card support, 4000mAh batteries, basic GSM/LTE for AT&T/T-Mobile, fingerprint readers, and a clean version of Android 7 Nougat.
- Blade Max View: This is the slightly more capable of the two phones. It is powered by a Snapdragon 435 processor with 3 GB of RAM and 32 GB of storage. The dual-camera configuration includes a 16-/2-megapixel combination. The main sensor has a five-element lens at f/2, while the secondary sensor has a three-element lens at f/2.4 The second sensor is meant chiefly for contrast and depth-of-field information for bokeh photos. The phone has an 8-megapixel front camera. The Blade Max View provides Cat 6 LTE on Verizon Wireless.
- Blade Max 2s: This is the spiritual successor to the Max XL. It is powered by a 1.4 GHz processor with 2 GB of RAM and 32 GB of storage. It includes a 13-megapixel main camera and a 5-megapixel selfie camera. The Blade Max 2s works well on Sprint's LTE 4G network.
Epic Games today made its popular Fortnite game available without an invitation. The app has been available in beta since August, though an invite was required for access. Epic Games has dropped the need for an invitation and most anyone can download the game. Fortnite is not available in the Google Play Store. Instead, people interested in the game will need to go to Epic's web site to download an installer. The installer then puts the game on the phone. The game started as an exclusive to the Samsung Galaxy Note9 and was later discovered to have a major security flaw in the installer (since patched). Fortnite is best played on high-end devices that have Android 8 Oreo installed. Some compatible phones include the Samsung Galaxy S7, S8, and S9 series; all Google Pixel phones; the LG G5, G6, G7, V20, and V30; the Asus ROG Phone and 5Z; the Essential Phone; the Huawei Mate 10, Mate 10 Pro, Honor 10, and Honor Play; the OnePlus 5, 5T, and 6; the HTC 10, U Ultra, U11+, U12+; the Sony Xperia XZ1, XZ2, and XZ3 series; as well as a handful of others from Xiaomi, ZTE, Nokia, and Lenovo.
A judge this week says ZTE violated the terms of the probation imposed on the company in March 2017, when it admitted to illegally shipping technology to Iran. ZTE settled with the government then and agreed to a probationary period through 2020. The judge now says ZTE violated its probation when it made false statements to the U.S. concerning disciplinary actions it was supposed to take against its managers. This same action caused ZTE to run afoul of the Commerce Department, which in April banned ZTE from using U.S. parts and software. That ban was lifted in July after ZTE paid a $1 billion fine, put $400 million more into escrow, and fired dozens of managers. U.S. District Judge Ed Kinkeade extended the term of a U.S.-appointed monitor two more years, through 2022, for violating its probation. A separate monitor from the Commerce Department will oversee ZTE's importing and exporting activities for a period of 10 years.
The FCC today revealed the ZTE Blade X2 Max in documents made public on the agency's website. The phone, a follow-up to the Blade X Max, appears to be bound for Cricket Wireless based on branding seen on the user manual and AT&T LTE banding (14/30). Other features confirmed by the FCC include dual rear cameras, a rear-mounted fingerprint reader, a 3.5mm headphone jack, and a USB-C port for charging. The Blade X2 Max relies on a nano SIM card and the tray also supports microSD memory cards. The phone's screen adopts the 16:9 aspect ratio. The draft user manual makes reference to the size of the display, which it says measures 6 inches with full HD resolution. The manual also indicates the battery may be 4,080mAh, and the phone may include 2 GB of RAM and 32 GB of storage. Last, the manual notes the phone's two rear cameras are a 16-megapixel main sensor and a 2-megapixel depth sensor. The front camera is 8 megapixels. Information found in the draft user manual is subject to change. Given ZTE's current position in the U.S. market, it is possible this phone will never reach the market. ZTE was forced to put operations on hold for three months after the U.S. banned it from accessing U.S.-made parts and software. ZTE only returned to full operations in July. The company says it still considers the U.S. market vital to its success. ZTE implied it will most likely sell new devices direct to consumers online rather than through carrier distribution deals. Cricket has not confirmed that it will sell the ZTE Blade X2 Max.
A new bipartisan bill in the Senate would see ZTE smacked with heavy fines if it were to violate its settlement agreement with the U.S. ZTE reached an accord with the U.S. earlier this year over its skirting of prior settlement agreements. The company paid a hefty fine and agreed to put an additional $400 million in escrow, as well as replace most of its management. The deal was largely brokered by the Trump administration and allowed ZTE to resume business operations after the U.S. government banned it from using U.S.-made hardware and software. Despite support from the Trump administration, the deal was not popular among some members of congress. That’s why three Republican and three Democratic senators introduced a bill this week that would cause ZTE to forfeit the $400 million in escrow if it violates its new agreement. The authors of the bill want to see reports from ZTE concerning its compliance every 90 days. "This bipartisan legislation would ensure that if ZTE once again violates trade restrictions or its agreement with the U.S., it will be held accountable in a significant, painful way," said lead sponsor of the bill, Senator Mark Warner, who also serves on the Senate Intelligence Committee. The bill still needs to pass the Senate, the House of Representatives, and be signed by the President before it could be considered law.
Now that ZTE has resumed full operations, the company is focused on rebuilding its U.S. business. While the new Axon 9 Pro flagship is not going to be sold in the U.S, ZTE does plan to bring at least one new phone to the U.S. market before the end of the year, said executive Jeff Yee. ZTE is working to repair its relationships with U.S. carriers, where it found success with affordable phones with large screens. Yee wouldn't say if it's next U.S.-bound device will be a low-cost phone or a premium phone. Initially, the company will likely sell new devices through the open market, rather than via carriers. ZTE also flatly denies that its phones pose any sort of security risk to Americans. The U.S. government has targeted ZTE and Huawei this year, claiming phones from the two companies could be used by the Chinese government for spying. The government has issued orders preventing government workers from using ZTE or Huawei phones for government work. Yee says the company doesn't send any data from its phones to China, and its phones are secure. ZTE believes it can recoup at least some of its lost business as it pushes forward.
ZTE is back! After facing a hard-hitting ban on parts and software, the China-based phone maker is up and running full steam once more. ZTE decided the IFA trade show was a suitable place to launch its first true flagship since 2016, the new Axon 9 Pro. Here are our first impressions of ZTE's come-back device.
ZTE today announced the Axon 9 Pro, its first real flagship device since the 2016 Axon 7. This new phone adopts a metal-and-glass design with 2.5 curved glass on front, a metal frame, and glass on the back. The phone offers a 6.2-inch full HD+ (2,248 x 1,080) AMOLED screen with what ZTE calls Axon Vision. Axon Vision uses AI to change the screen's settings in real time to ensure the best color and brightness given the environment. The screen relies on an independent display processing chip with MEMC (motion estimation, motion compensation) technology, which can boost 24/30fps video to 60fps for smoother playback. Last, the display supports HDR10 video playback. A Snapdragon 845 provides the brains of the operation and it is aided by 6 GB of RAM, with 128 GB of internal storage. The dual-camera configuration relies on the 845's AI capabilities to introduce new features. The main camera has a 12-megapixel sensor at f/1.75 with optical image stabilization, autofocus, and dual photo diode. The secondary camera has a 20-megapixel sensor and a 130-degree wide angle of view. The front camera has a 20-megapixel fixed-focus camera with face detection. The AI features include intelligent motion tracking for constant focus, smart portraiture, and better slow motion. The phone has a 4,000mAh battery that ZTE says is optimized via constant AI-based evaluation. It will proactively shut down background apps that are draining power. The battery supports rapid charging and Qi-based wireless charging. A fingerprint sensor is located on the rear and the phone is IP68 certified for protection from water/dust. Radios include NFC, dual-band 2x MIMO WiFi, Bluetooth 5.0, GPS, and LTE. Last of the major features are stereo speakers with Dolby Atmos for clear, loud sound. The phone ships with Android 8.1 Oreo. Pricing is expected to be in the neighborhood of $750. ZTE says the device is chiefly intended for overseas markets.
ZTE today said it plans to announce its flagship phone of the year during the IFA trade show taking place in Berlin. ZTE has a press conference scheduled for August 30, which is when the device will be unveiled. ZTE has been quiet since the spring months when the U.S. banned the company from using parts and software from American companies. ZTE was forced to pay a fine and agree to replace many of its executives to appease the U.S. government. It also had to install a U.S.-appointed compliance officer to ensure the company doesn't cross the line again. It didn't resume full operations until July. ZTE did not provide any details about its new flagship phone. Its last major device was the Axon M, sold by AT&T last fall. The Axon 7 flagship debuted in the summer of 2016. The Axon 9 arrives at a time of intense competition between Chinese firms such as Huawei, OnePlus, Oppo, and others.
Australia has banned Huawei from supplying equipment for future 5G mobile networks. Australia made the argument that Huawei poses a threat to its national security. Huawei is one of the world's largest suppliers of telecommunication's gear. Chinese firms are required to help the Chinese government engage in espionage when asked. Huawei says China-based ZTE is also being prevented from supplying 5G networking gear to Australian wireless companies. China said the move was an "excuse to artificially erect barriers and conduct discriminatory practices." Australia's move mirrors the stance of the U.S., which has barred Huawei and ZTE from providing the networking gear for wireless networks. The U.S. has gone further in mandating that government employees don't use phones made by Huawei or ZTE.
President Trump this week signed the Defense Authorization Act, which bans the use of Huawei or ZTE devices by government personnel. The Defense Authorization Act is an annual piece of legislation that provides funding to the military. Congress added language to the act that makes it illegal for any government employee to buy or use devices or components from either Huawei or ZTE, both of which are considered by some to be security threats. The move puts a bookmark at the end of a tumultuous year for Huawei and ZTE, which have seen their U.S. businesses come under attack. Early in the year, Huawei lost distribution deals with AT&T and Verizon. Later, ZTE was hit with a ban on using U.S. components and software. ZTE was forced to pay a significant fine and agree to other conditions in order to get back to business. The ban on government use of Huawei and ZTE gear goes into effect over the next two years.
The Democratic National Committee has told candidates running as Democrats this fall they should not use phones made by Huawei or ZTE. The Trump administration says they represent a security risk. Earlier this year, the administration pressured AT&T and Verizon to drop plans to sell Huawei devices. Best Buy also stopped selling Huawei devices. "Please make sure that you are not using or purchasing ZTE or Huawei devices anywhere within your staff — for personal or work-related use," said Bob Lord, the DNC's chief security officer in an email to party members. FCC Chairman Ajit Pai also believes Huawei represents a threat of espionage. Huawei phones are not sold on military bases. Neither Huawei nor ZTE commented on the matter.
Senators have overturned an agreement added to the National Defense Authorization Act, or NDAA, that would have made it more difficult for President Trump to remove the ban instituted against ZTE. Earlier this year, the Commerce Department said ZTE lied about a previous settlement and banned the company from using American parts or software in its phonres for a period of seven years. The ban crippled ZTE, but was eventually overturned by the Trump administration. ZTE got back to business earlier this month. Seeking to block Trump from easing up on the ban, members of the Senate added language to the NDAA that sould have made it difficult for Trump to get around the ban. It didn’t work. Now that Trump the administration and Commerce Department have agreed to let ZTE return to business, members of the Senate have removed the anti-ZTE language from the NDAA. "By stripping the Senate’s tough ZTE sanctions provision from the defense bill, President Trump — and the congressional Republicans who acted at his behest — have once again made President Xi and the Chinese Government the big winners," said Senator Chuck Schumer in a statement. The NDAA is vital legislation that must be passed every year in order to ensure the Department of Defense is funded.
The U.S. Commerce Department has lifted its ban on U.S. companies doing business with Chinese phone and telecom equipment maker ZTE. The company can now resume operations, after all but shutting down since April due to the ban. The company is highly dependent on U.S. companies, including Qualcomm and Google, for its smartphone chips and software. The deal to lift the ban was done at the instruction of President Trump, and includes a $1 billion fine and a complete change of ZTE leadership. Today's action marks the end of a years-long saga that started when ZTE was caught selling equipment to North Korea and Iran in violation of a U.S. embargo.
ZTE has now replaced four of its top leaders (CEO, CFO, CTO, and head of HR) and its entire board of directors, as required by a tentative deal with the U.S. government. The company has also agreed to pay a $1 billion fine. With these steps complete, the U.S. Commerce Dept. may soon lift the sales ban that has forced the company to suspend all operations since April. In the meantime, the government has granted ZTE a one-month waiver allowing it to resume providing support for its products for the month of July. While ZTE is Chinese company, it is highly dependent on U.S. suppliers — including Qualcomm and Google — which is why the Commerce Dept.'s ban on doing business with U.S. companies has effectively shut down the company. The deal to lift the ban was announced last month, and has President Trump's strong support. In Congress, the Senate version of a pending defense-policy bill would override the Commerce Dept. and keep the sales ban in place. The House version of the bill does not contain that language, a difference that remains to be reconciled.
ZTE is nearly ready to install a new board of directors, a step required by the U.S. Department of Commerce if the company wants to end the ban on U.S. supplies. The company held its annual general meeting in Shenzhen this week where shareholders voted on this and other matters. ZTE is expected to name eight new members to its board. In April, the Commerce Department banned ZTE from using U.S. parts and software, crippling the company. On June 7, the Commerce Department said it would end the ban as long as ZTE pays $1 billion fine, puts $400 million into escrow, and replaces its leadership. In addition to the new board, the Commerce Department wants all executives at or above the senior vice president level to be fired, along with any execs who played a role in the wrongdoing. ZTE will also have to put in place a U.S.-appointed compliance officer. The company has already paid the $1 billion fine. Once all these steps are taken, ZTE will have met the Commerce Department's conditions. Even if it does, it is unclear when the company might be allowed to get back to business. A number of senators and congressmen want the ban to remain in place. Since the ban went into effect, ZTE has been largely idle. Its shares have dropped 60%, erasing $11 billion from its valuation. The new board may be voted in as soon as today.
ZTE has taken the first step toward resuming operations by forking over $1 billion to the U.S. Department of Commerce. The fine is part of a new agreement the company reached with the government in an attempt to end the destructive ban that prevents it from buying U.S. software and hardware. ZTE still has to put $400 million into escrow and rearrange its top leadership, which are also aspects of the agreement. ZTE will lose the $400 million if it skirts the rules again. The company was punished for breaking a 2017 settlement over illegal sales to Iran and North Korea. ZTE misrepresented to U.S. officials how it handled portions of that earlier settlement. The Commerce Department then banned ZTE from using U.S. products for a period of seven years, which has effectively forced the business to cease operations. The new agreement was brokered by the Trump administration, but it is encountering resistance from members of Congress. It's unclear if or when the Trump administration and Congress will reach a final agreement over the company's fate.
ZTE will be the topic of discussion at a meeting today between President Trump and members of the Senate and House of Representatives, reports Reuters. Trump wants to talk about the "problematic" amendment made to the National Defense Authorization Act (NDAA) earlier this week, which will keep certain sanctions against ZTE in place. The administration and lawmakers have different viewpoints on what to do with ZTE. The company was caught lying about a 2017 settlement over exports to Iran and North Korea in violation of sanctions. As a result, the Department of Commerce banned U.S. companies from selling ZTE software or hardware for a period of seven years. The ban has effectively put ZTE out of business, as it is unable to buy the components it needs to make phones. The Trump administration wants the ban lifted and the Commerce Department agreed to a new fine along with required management changes at ZTE. Members of the Senate and House, however, contend that ZTE's punishment was fair and should be upheld. Despite the Commerce Department agreement, Senators added language to the NDAA that keeps the sanctions in place, putting it at odds with the Trump administration. The White House confirmed that the meeting will take place, but did not specify the attendees.
The Senate approved legislation that would see the ban against ZTE remain in place. The chamber on Monday voted in favor of the National Defense Authorization Act (NDAA), a bill passed by the Senate every year. Republican Senator Tom Cotton and Democratic Senator Chris Van Hollen introduced a measure to the bill earlier this month that restores the penalties against ZTE. ZTE was sanctioned for violating the terms of a 2017 settlement agreement over unlawful sales to Iran and North Korea. Beginning in April, the company was cut off from U.S.-made hardware and software for a period of seven years. The company has largely been idle since. The Trump administration sought to help ZTE and the Commerce Department reached an agreement with the company. Under the terms of the arrangement, the Chinese phone maker must pay a $1 billion fine, put $400 million into escrow, wholly change its top leadership within 30 days, an accept a U.S.-led compliance officer. Now that the NDAA has passed in the Senate, it has to be reconciled with the House of Congress' version of the NDAA and later signed by the President. It's unclear how the Senate, House, and President will resolve the issue.
The 3GPP today ratified another piece of the 5G specification, termed the Standalone 5G New Radio, or SA 5G NR. This spec is for 5G networks that are developed on their own, apart from legacy or pre-existing networks. The Non-Standalone portion of the 5G spec was ratified late last year and covers 5G that hooks into existing LTE 4G systems. "The freeze of Standalone 5G NR radio specifications represents a major milestone in the quest of the wireless industry towards realizing the holistic 5G vision," said BalÃ¡zs BertÃ©nyi, chairman of 3GPP RAN. "5G NR Standalone systems not only dramatically increase the mobile broadband speeds and capacity, but also open the door for new industries beyond telecommunications that are looking to revolutionize their ecosystem through 5G." The SA 5G NR and the NSA 5G NR standards will together include the technology used by commercial entities, the air interface, and end users. The spec was approved by more than 600 delegates from the world's leading carrier, handset, and silicon vendors. Some participants included AT&T, DISH, Ericsson, Huawei, Intel, Kyocera, LG, MediaTek, Nokia, Qualcomm, Samsung, SoftBank/Sprint, Sony, Verizon, Xiaomi, and ZTE. The 3GPP said the technical specifications for the ratified SA 5G NR will be published in the days ahead.
ZTE's roller-coaster ride with the U.S. government has taken another turn. The Senate may vote on legislation this week that would negate the Trump administration's deal to get ZTE back to work. Last week the Commerce Department said it had reached an agreement with ZTE. Under the terms of the arrangement, the Chinese phone maker must pay a $1 billion fine, put $400 million into escrow, wholly change its top leadership within 30 days, an accept a U.S.-led compliance officer. The ban will remain in place until ZTE makes the payments, which it has yet to do. Republican Senator Tom Cotton and Democratic Senator Chris Van Hollen today introduced the measure, which would restore the penalties against ZTE, to the National Defense Authorization Act (NDAA), a bill voted on by the Senate every year. Reuters says the measure could be added to non-controversial portions the NDAA, or areas that don't come under heavy debate in the Senate. If the measure is passed in the Senate, it would have to be reconciled with the House of Congress' version of the NDAA and later signed by the President. ZTE was sanctioned for violating the terms of a 2017 settlement agreement over unlawful sales to Iran and North Korea. Beginning in April, the company was cut off from U.S.-made hardware and software for a period of seven years. The company has largely been idle since.
The Commerce Department has reached a deal with ZTE that will get the company out from under a ban on U.S. parts and software. Under there terms of the agreement, ZTE will pay a fine of $1 billion and put an additional $400 million into escrow that it will forfeit if it violates the terms. In addition to the fine, ZTE must change its entire board of directors within 30 days. Further, the U.S. will require a compliance team to monitor the company. "I'm very, very happy with this arrangement," said Commerce Department Secretary Wilbur Ross on CNBC. "It is the strictest and largest fine that has ever been brought by the Commerce Department. We are literally embedding a compliance department of our choosing into the company." It's not clear how quickly ZTE will be allowed to get back to work. Analysts believe the company has lost billions of dollars during the shutdown, amidst soured relationships with partners and customers. ZTE was punished for violating the terms of an earlier settlement that was put in place after it was caught selling parts to Iran and North Korea.
ZTE has agreed to preliminary terms with the Commerce Department that will eventually allow it to get back to business. The company has effectively shut down in the wake of a Commerce Department ban that prevents the company from using U.S. components and software in its phones. The company has taken job responsibilities away from select executives, filed official letters of reprimand, and is attempting to take back bonuses paid to some execs, says the Wall Street Journal. ZTE will also have to pay a sizable fine. The deal is not final and is still under review from the Trump administration, which has used the company's plight to invigorate trade talks with China. Even if a deal is struck and ZTE resumes operations, it is facing steep challenges due to disgruntled customers. For example an Italian carrier, called Wind Tre SpA, has demanded $117 million from ZTE due to stalled construction on base stations. Moreover, T-Mobile has walked away from a distribution deal worth more than a billon dollars, according to the Journal, thanks to ZTE's inability to supply it with phones and other gear. ZTE was the fourth-largest supplier of phones in the U.S. before the ban went into effect. It's not clear if or when a deal might be fully signed and put into effect.
ZTE may have to agree to a heavy fine and sweeping management changes if it wants to resume operations. The Trump administration is prepared to levy up to $1.7 billion in fines against the company to punish it for violating the terms of an earlier settlement. Further, the Commerce Department wants "unfettered site visits" to ensure that ZTE is using U.S. parts as intended. The company may also be required to bring in a wholly new management team. In April, the Commerce Department banned ZTE from using U.S. parts and software for its devices, effectively putting ZTE out of business. The company ceased major operations in May. Sources cited by Reuters indicate that final terms of the settlement are not set and may change. Despite the Trump administration's work to get ZTE back in business, some senators believe ZTE represents a security threat and deserved the punishment. They are working to keep the ban in place.
The Trump administration has handed ZTE an olive branch, according to sources cited by the New York Times and Reuters. The Commerce Department has brokered a deal that will allow ZTE to resume operations as long as it agrees to pay a substantial fine, submit to American compliance officers, and wholly change is management team. If ZTE abides by these terms, the Commerce Department will lift its ban preventing U.S. companies from supplying ZTE with hardware and software. The Commerce Department socked ZTE with the ban last month after it discovered the company misrepresented actions concerning a previous settlement agreement. The Trump administration has been back-and-forth concerning ZTE’s fate over the last week and did not confirm the details of its recent trade meetings with China. Some U.S. lawmakers are not convinced ZTE should be allowed to resume operations and have been vocal in their opposition to any deal that sees ZTE allowed to buy U.S. technology.
The U.S. and China are near to reaching a deal that would offer ZTE reprieve from the seven-year ban enacted against it by the Commerce Department. Sources cited by the Wall Street Journal and Reuters suggest the negotiations are close to complete, but not finalized. Under the framework of the new deal, ZTE will have to pay a penalty and largely change the makeup of its board of directors and other leadership posts. The company was banned from using components and software from the U.S. because it violated an earlier settlement regarding its illegal sale of goods to Iran and North Korea. As a result, ZTE has largely been put out of business. The company has some 75,000 employees, mostly in Shenzhen, China. The talks come as President Trump's administration tries to hammer out a broader trade deal between the U.S. and China. Some congressmen are not happy with Trump's stance, as the Commerce Department believes its action was a fair penalty for illegal behavior. Republican Senator Marco Rubio blasted Trump's moves. "Making changes to their board and a fine won’t stop them from spying and stealing from us. But this is too important to be over. We will begin working on veto-proof congressional action," he argued via Twitter. On May 18, the House Appropriations Committee voted on an amendment that upholds the Commerce Department's sanctions against ZTE. Specifically, the amendment prevents the U.S. Commerce Department from renegotiating its sanctions against ZTE in order to prevent ZTE from gaining access to hardware and software from its U.S. suppliers. Other aspects of the Trump deal with China would see cuts in import tariffs for cars and car parts, and a change in the amount of U.S. agricultural products allowed into China. None of the parties involved commented on the matter, as any deal to lift the ban against ZTE has not been finalized.
The House Appropriations Committee this week voted on an amendment that upholds the Commerce Department's sanctions against ZTE. Specifically, the amendment prevents the U.S. Commerce Department from renegotiating its sanctions against ZTE in order to prevent ZTE from gaining access to hardware and software from its U.S. suppliers. The Commerce Department slapped ZTE with the ban last month after it discovered that ZTE misrepresented the actions it took in a 2017 settlement. Over the weekend, President Donald Trump surprisingly tweeted in support of ZTE, suggesting the Commerce Department help ZTE "get back into business, fast." ZTE has largely ceased operations and idled some 75,000 employees in the wake of the ban. The amendment voted on by the house will "prevent a foreign company that is beholden to its government — and that ignores embargoes — from infiltrating the devices and networks that are now indispensable to American life," said Rep. Dutch Ruppersberger (D-Md.) in a statement. "This amendment, which passed with the unanimous support of my colleagues on both sides of the aisle, shows that, when the United States enacts sanctions, we stand behind them." The bill was coauthored by Ruppersberger and Rep. Rosa DeLauro (D-Ct.).
Security, not trade, is the issue, say a handful of Senators who today pushed back against President Donald Trump's efforts to help ZTE. The U.S. Department of Commerce banned American companies from supplying ZTE with parts or software for a period of seven years. ZTE precipitated the ban by bungling a settlement agreement over its illegal sale of technology to Iran and North Korea. The company ceased most operations earlier this month. Over the weekend, Trump tweeted in support of ZTE. He suggested that too many jobs were being lost in China and he wanted to help the company get back in business quickly. Speaking Tuesday, Republican and Democratic Senators suggested that Trump's approach is not the right one. "I confess I don't fully understand the administration’s take on this at this point," said Senator Mac Thornberry. "It is not a question to me of economics, it is a question of security." Some in the government worry ZTE and Huawei devices could be used to spy on Americans. Thornberry indicated that he doesn't expect the Commerce Department will remove the ban. Trade emissaries from China and the U.S. are expected to meet again this week.
Samsung is speaking with a number of device makers, including ZTE, about supplying its Exynos mobile application processors. Samsung wants to expand its processor business in a bid to be more competitive with Qualcomm, MediaTek, and others. Samsung uses the Exynos line in its own Galaxy smartphones. The company supplies Exynos chips to only one outside business: China's Meizu. "We are talking to all OEMs," including ZTE, said Inyup Kang, head of Samsung’s logic chip business. For the moment, U.S. companies such as Qualcomm are forbidden from supplying ZTE with components due a Commerce Department ban. ZTE has halted business operations as it wrangles with the U.S. government in an attempt to reverse the ban. The ban highlights the risk of relying on a single company for parts. ZTE could avert some problems by diversifying its suppliers. Samsung's Kang said the company expects to announce new clients for its Exynos chipsets in the first half of 2019.
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.
President Trump took to Twitter this morning to suggest he's looking to recall the Commerce Department's ban against ZTE. "President Xi of China, and I, are working together to give massive Chinese phone company, ZTE, a way to get back into business, fast," wrote the President. "Too many jobs in China lost. Commerce Department has been instructed to get it done!" The Commerce Department banned U.S. companies from selling parts and software to China-based ZTE for failing to live up to a 2017 settlement agreement. ZTE was caught selling parts to Iran despite international sanctions. The company paid a massive fine and agreed to penalize some 35 managers as a result. The Commerce Department says ZTE did not penalize its managers and then lied about it. The ban, which is supposed to last through 2025, has effectively put ZTE out of business. Last week, the company ceased most operations as a result. It's unclear what President Trump actually said to the Commerce Department, nor is it clear how long it might take to actually reverse the ban.
ZTE has all but shut down in the wake of a government-issued ban that prevents U.S. companies from selling ZTE hardware or software. "As a result of the Denial Order, the major operating activities of the company have ceased," said ZTE in exchange filings. "As of now, the company maintains sufficient cash and strictly adheres to its commercial obligations subject to compliance with laws and regulations." The company has maintained some staff in order to fight the ban. It is talking to the U.S. "in order to facilitate the modification or reversal of the Denial Order by the U.S. government and forge a positive outcome in the development of matters." The company didn't spell out details of its operations shutdown. ZTE enjoyed success in the U.S. over the last few years where it found a niche selling low-priced, big-screened Android phones via prepaid carriers MetroPCS and Cricket Wireless. The company's U.S. partners have been silent on its fate since the ban was first ordered. Speaking on the sidelines of the Google I/O developer conference, one Google executive said the situation "was bad for Android."
The Taiwanese government has given MediaTek, a Taiwan-based supplier of mobile chips, permission to once again sell its products to ZTE. After the U.S. government halted U.S. suppliers from selling to ZTE for a period of seven years, the government of Taiwan paused such exports in its own country. It required MediaTek and other Taiwan businessss to file an application for permission to sell to ZTE. Taiwan granted MediaTek, which specializes in mobile processors, that permission today. "We fully understand high-tech factories' characteristic of fast-paced shipments of goods, we won't create obstacles for the pace of their exports," said the Taiwan Bureau of Foreign Trade in a statement provided to Reuters. "Taiwan's government has its own control mechanisms, which is independent of the way the U.S. looks at it in a given situation." ZTE recently filed official paperwork with the U.S. Department of Commerce seeking an end to the ban, which threatens its very survival.
ZTE has filed an application with the U.S. Commerce Department's Bureau of Industry and Security in hopes that the government will suspend its ban against the company. Last month, the Commerce Department banned U.S. companies from selling parts or software to ZTE for a period of seven years. The government put the ban place because ZTE was caught misrepresenting the actions it took after settling with the government for an earlier infraction (exporting technology to Iran). ZTE has called the ban unfair and unreasonable, suggesting it could put the company out of business. The ban prevents companies such as Qualcomm from supplying ZTE with processors and also prevents companies such as Google from licensing the Android operating system to ZTE. Last week, a U.S. trade delegation met with Chinese trade officials who asked the U.S. to reassess its actions against ZTE. The U.S. delegates said they would speak with President Donald Trump about the matter.
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.
The government doesn't want military personnel buying Huawei or ZTE phones. The Pentagon has ordered the retail stores on U.S. bases around the globe to cease selling phones made by the two Chinese companies. "Huawei and ZTE devices may pose an unacceptable risk to the department’s personnel, information and mission," said Army Maj. Dave Eastburn, a Pentagon spokesperson, in a statement provided to the Wall Street Journal. "In light of this information, it was not prudent for the department's exchanges to continue selling them." Maj. Eastburn said the government can't tell troops not to buy Huawei or ZTE phones for personal use, at least not yet. Huawei and ZTE have been squeezed by the Trump administration this year, which insists phones from these companies could be used by the Chinese government to spy on Americans. The Pentagon worries Huawei and ZTE phones could give foreign governments insight into base operations and troop movements. Huawei and ZTE strongly deny such claims. Members of the Republican party have already floated legislation that would make it illegal for government personnel to buy Huawei phones for work purposes. More recently, the Department of Commerce banned U.S. companies from selling parts or software to ZTE for a period of seven years. Huawei said, “We remain committed to openness and transparency in everything we do and want to be clear that no government has ever asked us compromise the security or integrity of any of our networks or devices.”
Taiwan-based MediaTek today said it has halted its business dealings with China-based ZTE. MediaTek, along with other Taiwan companies that supply ZTE, received a memo from the government of Taiwan that orders it to obtain a permit before shipping any goods to ZTE. "What we do — asking suppliers to apply for an export permit — [is] for the companies' own good, to ensure they are doing legal business with the Chinese firms," said David Hsu, deputy director-general and spokesman for Taiwan’s Bureau of Foreign Trade. MediaTek's CEO today said the company would comply with the order during a call with analysts, suspending shipments to ZTE until it gathers the proper paperwork from the Taiwanese government. Without access to MediaTek chips, ZTE is truly in dire straights. The company is already forbidden to buy chips from U.S. suppliers, such as Qualcomm and Intel, thanks to a ban from the Department of Commerce. The company cannot build mobile phones without processors. ZTE did not immediately comment on the development. The news was first reported by the Nikkei.
ZTE today said it is preparing to take "certain actions" within the scope of U.S. law to fight the Commerce Department's ban against the company. Earlier this month, the Commerce Department banned U.S. companies from selling ZTE hardware or software, such as mobile processors and the Android operating system, for a period of seven years. The move puts ZTE's survival as a phone company at critical risk. Without access to Android, in particular, ZTE will not be able to sell phones in the U.S., where it has found a comfortable niche with prepaid carriers including Cricket Wireless and MetroPCS. The ban was put into effect because ZTE broke a 2017 settlement agreement concerning its sale of forbidden items to Iran. ZTE did not spell out exactly what actions it will take. Late last week a member of the Commerce Department said it will allow ZTE to argue its case via unofficial channels.