Table of contents:
The president of the United States, Donald Trump, has just dealt a new blow to the Asian brand ZTE: the administration of the American country has prohibited any American company from selling any product to ZTE for the next seven years. These products include the Qualcomm Snapdragon processor, made in the United States, or any component of the Dolby brand.
ZTE and the US: a long-standing feud
And what is this punishment due to? In March 2017, ZTE pleaded guilty, in a federal court in the state of Texas, to having bypassed the embargo that prohibited it from selling materials to Iran and North Korea. At that time, the Asian firm was sentenced to 890 million dollars in fine. In addition, it made the commitment to dismiss 4 high-ranking employees and penalize 35 employees with reduced bonuses or any other punishment that the company deems appropriate.
Despite the punishment, in March it was learned that, although he had complied with the order to dismiss the 4 high-ranking officials on his organization chart, he had not sanctioned the rest of the employees. All this has meant that the government decides to punish the brand again, which receives from US companies between 25% and 30% of the components with which it builds its devices.
The decision to punish the Chinese brand is one more stone in the tense, and apparent, trade cold war that the United States faces against the Asian giant. On April 5, the Trump administration announced tariffs on the import of 1,300 Chinese products worth 50,000 million dollars, to which China responded with taxes of a similar amount. Among the 1,300 products that have increased their taxes are goods with high added value, such as chemical and pharmaceutical products, electronic devices and industrial machinery.
They are closely watched in the UK
The prohibition of the purchase of products by ZTE in the United States has an immediate effect. No company, since yesterday, can sell any of its products to the mobile phone company under any circumstances. To this blow must be added an additional fine to the one already imposed in March of last year of 300 million dollars. On the other hand, Asians are also in trouble with the UK.
The National Cyber Security Center of the United Kingdom (NCSC) has published a manifesto aimed at the telecommunications sector in which it states that the use of equipment manufactured by ZTE may pose a risk to the privacy of citizens. A letter, in addition, published on the same day that the prohibition of the sale of components to ZTE took effect in the United States. In the statement, the NCSC refers to the fine imposed on ZTE by the American government.
There is already an answer on the Asian side of the dispute. China has assured that it will take appropriate measures to protect its companies. For now, it has started by demanding that the American government create a "fair, equitable and stable environment for Chinese companies" that operate within its borders. ZTE is a company that has established extensive commercial cooperation with companies in the United States, where it has already created tens of thousands of jobs. ZTE has declined to comment for the time being.
