Timeline Capsule
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Time Capsule Details | BeingBlackToday.com
2018
WORLD STAGE
North America - China

Donald J. Trump, US President
and Xi Jinping, President of China
President Trump Sweetens the Pot by Lifting Sanctions Against China's ZTE for Trade Violations

President Donald Trump announced a deal to save Chinese phone manufacturer ZTE. In a series of tweets, Trump said that he will allow ZTE to “reopen with high level security guarantees, change of management and board.” The agreement will also require the Chinese phone maker to purchase parts from the US and pay a $1.3 billion fine.

If ZTE accepts, the government will lift an order banning US companies from doing business with ZTE for seven years – an order that had prevented ZTE from buying microchips and other components and has crippled its operation.

Background

ZTE sells smartphones and other technology devices and 53 US companies sell components to ZTE, making America the company's second biggest supplier after China, providing about  25% - 30% of the components used in ZTE's manufacturing operation.

ZTE Violates Trade Sanctions
in Exporting Technology to Iran
In 2012, under the Obama administration, the FBI found that ZTE had sold banned technology to Iran and tried to cover up its transaction to block investigation into its violation of trade sanctions and restrictions.

ZTE pleaded guilty in a US federal court for conspiring to violate U.S. sanctions by illegally shipping U.S. goods and technology to Iran.

In 2017, ZTE paid $1.19 billion to settle criminal and civil charges for illegally shipping telecommunications equipment to Iran and North Korea. 

As part of the 2017 settlement, ZTE agreed a seven-year suspended denial of export privileges, "which could be activated if any aspect of the agreement was not met and/or if the company committed additional violations of the Export Administration Regulations."

Also as part of the settlement, ZTE promised to fire four senior employees and discipline 35 others by reducing their bonuses or reprimanding them.

ZTE admitted that it fired the four senior employees but didn't take action against the others.

On April 16, 2018, for violating the terms of its sanctions case, the U.S. Department of Commerce banned all American companies from selling components directly, or via another country, to ZTE for seven years.

ZTE has been struggling under the ban.