Sign up for our daily briefing
Make your busy days simpler with Axios AM/PM. Catch up on what's new and why it matters in just 5 minutes.
Stay on top of the latest market trends
Subscribe to Axios Markets for the latest market trends and economic insights. Sign up for free.
Sports news worthy of your time
Binge on the stats and stories that drive the sports world with Axios Sports. Sign up for free.
Tech news worthy of your time
Get our smart take on technology from the Valley and D.C. with Axios Login. Sign up for free.
Get the inside stories
Get an insider's guide to the new White House with Axios Sneak Peek. Sign up for free.
Catch up on coronavirus stories and special reports, curated by Mike Allen everyday
Catch up on coronavirus stories and special reports, curated by Mike Allen everyday
Want a daily digest of the top Denver news?
Get a daily digest of the most important stories affecting your hometown with Axios Denver
Want a daily digest of the top Des Moines news?
Get a daily digest of the most important stories affecting your hometown with Axios Des Moines
Want a daily digest of the top Twin Cities news?
Get a daily digest of the most important stories affecting your hometown with Axios Twin Cities
Want a daily digest of the top Tampa Bay news?
Get a daily digest of the most important stories affecting your hometown with Axios Tampa Bay
Want a daily digest of the top Charlotte news?
Get a daily digest of the most important stories affecting your hometown with Axios Charlotte
Photo: Cheriss May/NurPhoto via Getty Images
Commerce Secretary Wilbur Ross told CNBC on Thursday morning that U.S. negotiators have "executed a definitive agreement with ZTE."
Why it matters: Compromise with ZTE — a repeat violator of U.S. sanctions against Iran and North Korea and a company identified as a national security threat by the Pentagon — could set a dangerous precedent for trade negotiations with China.
"At about 6 a.m. this morning, we executed a definitive agreement with ZTE. And that brings to a conclusion this phase of the development with them."— Wilbur Ross
Worth noting: President Trump announced in a tweet on May 25 that a deal had been reached.
The details:
- The Commerce Department announced that the terms of the agreement include a $1 billion fine against ZTE plus $400 million in escrow to cover any future violations in exchange for the U.S. lifting its ban.
- "These penalties are in addition to the $892 million in penalties ZTE has already paid to the U.S government under the March 2017 settlement agreement," the Department said.
- ZTE will also have to "retain a team of special compliance coordinators selected by and answerable to" the Department for 10 years.
The backdrop: China lobbied for a compromise on ZTE after the Commerce Department issued a 7-year ban on American companies selling parts to the Chinese company, which led to its effective shutdown. The ban was put in place to punish ZTE for selling products with American parts to North Korea and Iran.
Go deeper: How ZTE could change the game for the other, bigger Chinese phone maker under U.S. scrutiny