Last year, ZTE has been accused of breaking the US sanctions against North Korea and Iran and in March 2017, ZTE agreed to cop a plea and pay $1.19 billion as a penalty for doing illicit shipping of telecom accessories to North Korea and Iran. In April 2018, the US Department of Commerce enforced a seven-year export ban on ZTE, which didn’t allow the US companies selling accessories to ZTE. This ban made the telecom company to almost defer its operations.
This deal is expected to make way for the Qualcomm’s (QCOM) acquisition of NXP Semiconductors (NXPI). Both the companies were up about 5% when the market opened today. Also, shares of technology companies like Acacia Communications (ACIA) and Lumentum Holdings (LITE) opened in the green but lost the momentum later.
President Xi of China, and I, are working together to give massive Chinese phone company, ZTE, a way to get back into business, fast. Too many jobs in China lost. Commerce Department has been instructed to get it done!
ADVERTISEMENT— Donald J. Trump (@realDonaldTrump) May 13, 2018
Meanwhile, last month President Trump tweeted that he is working with his Chinese President Xi Jinping to bring back ZTE into action again. The decision of lifting the ban against ZTE has been criticized by both Democrats and some of the Republican Party members and many had expressed their concerns about US national security.