Chinese telecommunications company ZTE was recently banned by the U.S. Department of Commerce from sourcing components from companies based in the United States as punishment for going against the terms of a sanctions violation settlement a couple of years before. This means that among other components, it can no longer source chips from Qualcomm for its smartphones. ZTE has been trying to get the ban relaxed and according to a new report, that might cost the company $1.7 billion.
ZTE has already ceased core business operations a couple of weeks ago after the ban was enforced. China’s trade officials have reached out to their counterparts in the U.S. administration to try and get a relaxation in the ban as well.
President Trump also tweeted recently that he’s working with President Xi of China to get ZTE back into business as soon as possible. Reuters reports that the administration is mulling claiming up to $1.7 billion in penalties from ZTE before lifting the ban.
The Department of Commerce may also demand unrestricted site visits to make sure that U.S. components are being used as claimed by ZTE. It wants ZTE to post the total number of U.S. components being used in its products on its website as well.
A deal is yet to be finalized. ZTE and the Department of Commerce haven’t commented on the report just yet.