Commerce Secretary: US reaches deal with China's ZTE

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US President Donald Trump came under criticism for announcing last month that he would reverse the ban, with some lawmakers warning that payments do not address security concerns over Chinese telecommunications equipment. In an interview on CNBC, Ross said penalties amounted to $1 billion and that ZTE agreed to install new management and a compliance team picked by the U.S. The visits would verify that ZTE is using US components as they have agreed.

The ban was imposed after ZTE failed to comply with an agreement with the Commerce Department in 2017, when it pleaded guilty in federal court in Texas to conspiring to evade USA embargoes by illegally shipping U.S. goods and technology to Iran.

In total, the US will collect $1.7 billion from the Chinese phone company for violating sanctions against Iran and North Korea.

Reuters reported earlier this week that the two sides were close to reaching a deal that would allow ZTE to resume business as usual.

A Commerce Department spokesman said on Tuesday that "no definitive agreement has been signed by both parties".

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ZTE has become a critical part of the broader discussions between China and the USA, the two largest economies in the world, over trade tensions and whether the two countries can prevent a trade war that could involve billions of dollars' worth of tariffs.

Since then, President Trump and his friends have stepped in to help ZTE stay alive, even though there is bipartisan agreement that the United States shouldn't. It will also allow unfettered site visits to verify that U.S. components are being used correctly, and post calculations of USA parts in its products on a public website. At the time, the Chinese government complained that the action could put the company, a major employer and star of the Chinese technology industry, out of business.

US Commerce Secretary Wilbur Ross said his department will end sanctions against embattled Chinese telecom equipment maker ZTE, resolving one issue that has increased tensions between Washington and Beijing.

Acacia Communications shares are up 4.9%.

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