ZTE’s nightmares may finally be coming to an end. Of course, it will still have to recoup its losses from both paying the US’ penalties and months of stopping operations but at least it will have a chance to. That is, if it gets off the ground at all. The US government just announced that ZTE has signed an agreement to pay an escrow and install a monitor. Once that’s done, the company will finally be free, sort of.
At the end of the day, or at least after it has sent the money, ZTE would have paid a total of $1.7 billion to the US ($1.3 billion fine plus $400 million escrow reported by Reuters), removed almost all its senior executives, and would practically give the US oversight on its operations. It’s probably more than any non-US company would have given the US government and shows the desperate circumstances ZTE has found itself in.
Of course, it does have itself to blame, whether you agree with the US sanctions or not. ZTE was caught lying about the reparations it promised to make after it was caught breaking US trade embargos. Two wrongs don’t make a right, as they say. And so a seven-year ban was imposed, bringing ZTE to its knees.
The US’ U-turn is just as curious and controversial. Trump basically said he was moved by the loss of many jobs in China because of the sanctions. It was also seen as a personal favor to Chinese President Xi and, therefore, a highly political move. And that’s also why there’s still a chance the agreement could fail.
A bipartisan movement in the US Congress is still working to block that agreement, which would restore the long-term ban on ZTE. If both Senate and House could agree on that amendment to the original bill, then ZTE will probably be forced to shut down again after its August 1 waiver expires.