New US Ban May Mean No ZTE Axon 9 Or Worse

NCSC warns UK telcos against ZTE equipment due to 'national security' concerns

That's because it's said to have broken the agreement signed with Washington after pleading guilty to breaking different sanctions by selling equipment to North Korea and Iran.

As part of the agreement, Shenzhen-based ZTE promised to dismiss four senior employees and discipline 35 others by either reducing their bonuses or reprimanding them, senior USA officials told Reuters.

A new report this morning reveals that a move by the United States to ban American firms selling components to the Chinese telecom equipment maker ZTE Corp will also hit a target closer to home: Qualcomm, a major supplier of chips for ZTE's phones.

And although the White House and the Committee of Foreign Investment in the U.S. has moved against China in recent weeks, it insisted that the new decision to block ZTE - already under investigation by the Barack Obama administration - is part of a backlash against the country which also includes countries such as Germany, Australia and Canada. For more on this, read the full Reuters report here.

As part of the agreement, ZTE pledged to fire four senior executives and apply sanctions to another 35 employees for participating in these "illegal" actions.

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The West warned telecoms operators not to use ZTE equipment because its state ownership raised security fears.

The Chinese company paid $890 million in fines and penalties after it pleaded guilty past year to conspiring to violate US sanctions by illegally shipping USA goods to Iran.

It also comes amid heightened tensions between the US and China, which are now engaged in a tit-for-tat exchange of possible tariffs.

A senior department official said that the company "provided information admitting that they had made false statements".

"China does not play by our rules, and we must be vigilant against Chinese threats to both our economic security and national security", said Republican Representative Robert Pittenger after the Commerce announcement.

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Mr Trump has repeatedly accused Beijing of "manipulating its currency", tweeting: "Russia and China are playing the Currency Devaluation game as the USA keeps raising interest rates".

For ZTE itself, the latest US action means one of the world's top makers of smartphones and communications gear will no longer be able to buy technology from American suppliers, including components central to its products. Last year ZTE sold 46.4 million smartphones with half of the phones using Qualcomm chips.

Shares in optical networking equipment maker Acacia Communications Inc, which gained just under a third of its total 2017 revenue from ZTE, tumbled 35 percent. The technology bought by the company includes components central to its products.

The U.K.'s national Cyber Security Centre warns the telecommunication companies of the country that, "National risks from ZTE equipment and services can not be mitigated".

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Wang, who will be in Tokyo until Tuesday, will also participate in the fourth China-Japan High-level Economic Dialogue. Japanese officials said Kono and Wang agreed on the importance of maintaining the world's system of free trade.

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