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China's ZTE says United States sanctions have crippled operations

14 May 2018

Chinese smartphone manufacturer ZTE, the subject of a seven year U.S. export ban, recently said that it had to close up shop because of its inability to source software, components and hardware from the U.S. But the phone and network equipment maker, who the U.S. accused of spying on American citizens and corporations on behalf of the Chinese government, has found an unlikely ally in U.S. president Donald Trump.

Trump earlier in the day said he's working with Chinese President Xi Jingping to get Chinese company ZTE "a way to get back into business, fast".

"Too many jobs in China lost", he said. The export ban was placed on ZTE after the company violated US sanctions and sold goods and services to Iran and North Korea.

In a remarkable development, President Trump has thrown an olive branch to controversial Chinese telecom firm ZTE less than a week after it ceased its main business following restrictions from the USA government.

As one of the world's largest telecom equipment makers, ZTE relied on USA companies such as Qualcomm and Intel for components.

According to the U.S. Government, the step was taken because the company had failed to comply with a settlement related to ZTE shipping U.S. -made goods to Iran in violation of U.S. sanctions.

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Spokesmen for Zinke and Pompeo didn't immediately respond to a request for comment sent outside normal business hours.

While it's not surprising that Trump would announce his support for such a move on Twitter, the fact that he's so forcefully supporting ZTE in the first place raises eyebrows for a number of reasons.

ZTE depended on American chips and other components, and is unable to continue operating without key supplies. Last week, Telstra said it would stop sales of ZTE smartphones, though it indicated it was "hopeful that ZTE will be able to reach a resolution to this matter soon so that we can recommence selling Telstra-branded ZTE devices".

The ban came two months after two Republican senators introduced legislation to block the U.S. government from buying or leasing telecommunications equipment from ZTE or Huawei, citing concern the companies would use their access to spy on United States officials.

For instance, MTN, a South Africa-based wireless carrier with 220 million customers throughout Africa and the Middle East, said the possibility ZTE would collapse forced the carrier to develop contingency plans.

China's ZTE says United States sanctions have crippled operations