Things are looking bleak as ZTE ceases main business operations

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Chinese telecommunications company ZTE has halted its main operations after USA authorities cut off its access to American suppliers as President Donald Trump steps up pressure over trade and technology issues with Beijing.

As of now, all major operating activities have been shut down while ZTE tries to negotiate a modification or even reversal of the Denial Order.

As punishment for breaking United States sanctions against Iran and North Korea, the Tump administration slapped a seven-year ban on American suppliers selling components, chips, and software to the firm.

After getting cut-off from American technology suppliers last month, many of us have been wondering what ZTE would do without access to so many of its critical suppliers.

However the company stated that it still has enough money to fulfil its commercial obligations, and is communicating with the United States government to try and modify or reverse the blocking order. A seven-year ban on US exports was stayed until USA officials determined that ZTE had been lying to them about its compliance with the penalties. With no phones rolling off the production line, ZTE has stopped sales through its website and Alibaba's Tmall marketplace. Meanwhile, this is just one example of the looming US-China trade war, which heavily involves technology companies like ZTE and Huawei. According to Reuters, the Chinese government discussed the issue with a US delegation last week amid intensifying US-China trade tensions.

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ZTE noted that it maintains "sufficient cash" to keep its commercial operations up and running for now, but at the time of writing the firm's online stores are showing as "under construction".

In attempt to find the now missing components that were supplied by American companies such as Qualcomm Inc. and Intel Corp., ZTE is turning to Taiwan-based chipmaker Mediatek Inc.

But the BIS activated the denial order last month after accusing ZTE of violating these conditions by offering full bonuses to executives implicated in the case and failing to issue letters of reprimand in a timely manner. Between 2010 and 2016, the company shipped $32 million worth of equipment to Iran that included USA components without authorization.

We've reached out to ZTE for further comment on the matter. The employee, who declined to be named, said business trips had been halted.

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