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U.S. bans American companies from selling to Chinese phone maker ZTE

Two people walk past a billboard announcing the new ZTE's dual screens foldable smartphone AXON M
The new ZTE's dual screens foldable smartphone AXON M display on a billboard at the Mobile World Congress in February in Barcelona. Photo: JOSEP LAGO / AFP / Getty Images

The Commerce Department is barring American companies from selling components to Chinese telecom equipment maker ZTE for seven years in retaliation to the company violating terms of a $1.19 billion sanctions settlement, the Department announced Monday

Why it matters: ZTE is a top smartphone seller in the U.S., and the ban will not only be a big hit to the Chinese company, which is reliant on U.S. products and software, but will also affect major U.S. suppliers, like Qualcomm, which will no longer be able to sell chips and other equipment to ZTE.