Damir Sagolj/Reuters U.S. President Donald Trump arrives for a welcoming ceremony in Beijing, China, November 9, 2017. REUTERS/Damir Sagolj
- The Trump administration reached a deal to ease sanctions on Chinese tech giant ZTE, Commerce Secretary Wilbur Ross said.
- ZTE will be forced to pay a $1 billion fine, make changes to its executive team, and allow a US compliance team to oversee activities.
- The ZTE deal comes after weeks of tense negotiations between the Trump administration and the Chinese government.
- Both Republicans and Democrats criticized Trump's willingness to make a deal on ZTE.
The US has reached an agreement to lift sanctions on Chinese telecom equipment maker ZTE, Commerce Secretary Wilbur Ross said Thursday.
"At about 6 a.m. this morning, we executed a definitive agreement with ZTE," Ross told CNBC. "And that brings to a conclusion this phase of the development with them."
The deal will force ZTE to pay an additional $1 billion fine, make changes to its management, and submit to closer examinations by a US compliance team.
The deal ends a tense period of negotiations between the US and Chinese governments over the telecom equipment maker.
The US originally placed sanctions on ZTE for selling goods with US parts into Iran and North Korea, a violation of sanctions against those countries. But after the Commerce Department determined that ZTE did not abide by those original sanctions, the company was hit with an even harsher penalty: It was not allowed to buy US parts.
Given ZTE's reliance on US-made parts, the sanctions effectively crippled the company and forced major operations to cease.
Though some Trump administration officials attempted to frame the ZTE sanctions as a separate national security issue, the president himself appeared to pull the discussions into the broader talks over trade.
The Trump administration's deal-making process on ZTE has been roundly criticized by lawmakers of both parties. They raised national security concerns about ZTE, a view shared by US intelligence agencies and other countries.