US Department of Commerce to accept additional evidence from ZTE

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The U.S. Justice Department has opened an investigation into suspected violations of Iran sanctions by China's Huawei Technologies, U.S. media reported on April 25. On the 20th of April, the US Congress published a report suggesting that ZTE, Huawei, and Lenovo were possibly involved in corporate espionage.

China's ZTE Corp. held a conference call on Wednesday with major suppliers, during which a company representative suggested the trade dispute with Beijing may have been a factor in last week's US order banning American firms from selling goods to the smartphone maker, according to a person familiar with the call.

"It was a factual update on what happened, what they've done since the order was put in place, and what they're doing to remedy the situation", a Semiconductor Industry Association spokesman said.

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Huawei, the third largest smartphone maker in the world, said that it complies with "all applicable laws and regulations where it operates, including the applicable export control and sanction laws and regulations of the UN, US and European Union".

Later that day, a senior US Commerce Department official told the Wall Street Journal that the agency had granted ZTE's request to present additional evidence on the case, even though the company does not have the right to make an appeal under the department's regulations. Washington accused ZTE of violating an agreement on punishing employees after the company illegally shipped United States goods to Iran.

Following a somewhat gloomy outlook from Apple's main supplier of semiconductors, Taiwan Semiconductor Manufacturing Co., markets are also losing confidence in Chinese hardware makers.

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Based on what we've seen so far, do you think the United States' hostility towards Huawei is warranted? China doesn't actually have any sanctions on the country, and shipping Chinese technology would not directly violate USA sanctions.

Huawei and ZTE have denied these allegations.

The Denial Order will not only severely impact the survival and development of ZTE, but will also cause damages to all partners of ZTE including a large number of us companies. The company failed to comply with the punishment set forth by the U.S. Commerce Department and now is banned from receiving U.S. exports until March 2025.

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The U.S. has threatened to impose tariffs on up to $150 billion of Chinese imports, prompting Beijing to warn that it would retaliate if Washington pushes ahead. ZTE's core business was harmed severely and the company halted trading of its Hong Kong and mainland shares.