Working to Rescue ZTE From Its Deathbed

Remember earlier this month when it was reported that Chinese tech giant ZTE was on the verge of going under? That’s because the United States effectively banned the company from purchasing hardware or software from US suppliers, effectively cutting them off and destroying their business model. Well, it looks like things might be turning around.

Last week, President Trump tweeted that he was “working together” with Chinese President Xi to give ZTE “a way to get back into business, fast” because “too many jobs in China lost.”

Now, The Wall Street Journal is reporting that the United States and China are getting close to a deal that could breathe new life in ZTE again. Discussions are ongoing, but the deal basically works like this.

The United States would lift the ban and allow ZTE to buy US components and use US software again. In return, ZTE would make significant changes to its management and pay some hefty fines. But things are more complicated than that. Instead of a “simple” law enforcement issue, ZTE is now being used as a bargaining chip in this international trade war.

There’s talk of removing tariffs on US agricultural products. China has already lowered tariffs on US cars and car parts. So, they’re buddy-buddy again? Well… it’s a little more complicated than that too. Even though Trump seems to be all for getting a ZTE deal going, both Democratic and Republican Congress members don’t like it, saying the President is just bending under pressure from Beijing.

For ZTE, there’s hope, but these negotiations are nowhere near a done deal.