China's ZTE paid over $2.3bln to US exporters last year

A salesperson stands at counters selling mobile phones produced by ZTE Corp. at an appliance store in Wuhan in central China's Hubei province in a file

"President Xi of China, and I, are working together to give massive Chinese phone company, ZTE, a way to get back into business, fast", Trump said.

"Too many jobs in China lost", Trump tweeted.

In April this year, the Commerce Department found ZTE had violated the terms of last year's settlement and banned USA companies from providing exports to ZTE for seven years.

President Donald Trump's surprise Sunday directive to his Commerce Department to back off an earlier decision and help Chinese telecom giant ZTE Corp. appears to be the opposite of what two of his cabinet secretaries had urged in 2016 when they were members of Congress.

ZTE said it is working with the Trump administration to reverse the sanctions and "forge a positive outcome in the development of the matters".

ZTE is the second-largest telecom equipment maker in China and generated $17 billion in revenue in 2017.

"As a result of the Denial Order, major operating activities have ceased", the company said in a Hong Kong Stock Exchange filing.

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The Chinese company sells smartphones and telecommunications equipment around the world and was slapped with the seven-year export ban because the Chinese company lied to American officials about punishing employees who violated USA sanctions on North Korea and Iran.

The Commerce Department did not immediately respond to a request for comment on Sunday.

ZTE depended on American chips and other components, and is unable to continue operating without key supplies.

Against that background, the Trump administration has barred military and government employees from using smartphones from ZTE and fellow Chinese maker Huawei.

The Trump administration also barred ZTE and fellow telecom equipment maker Huawei from selling goods on U.S. military bases and is considering a broader crackdown on the pair's sales into the US.

For instance, MTN, a South Africa-based wireless carrier with 220 million customers throughout Africa and the Middle East, said the possibility ZTE would collapse forced the carrier to develop contingency plans.

Lacking critical equipment, ZTE halted operations, stressing in a statement Wednesday that it is "actively communicating with the relevant USA government departments in order to facilitate the modification or reversal" of the Commerce Department's order.

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