ZTE will soon be restricted from purchasing components made in the US

ZTE is in hot water with the US Commerce Department after agreeing to sell parts and components from major US companies to Iran’s biggest telecom, and the company will likely have a hard time securing any US-made parts in the near future. A new export restriction will be placed on Tuesday that will effectively eliminate any other company’s ability to sell to ZTE.

Essentially, ZTE was selling things from manufacturers like Microsoft, Dell, and IBM to the Iranian telecom without any of the US companies being made aware of where their parts were going. Since the US has placed export controls on Iran, (which ZTE was allegedly aware of) no US products should have been sent there.

On Tuesday, companies will require a license to sell US-manufactured parts and components to ZTE, but the Commerce Department has stated that most requests for those licenses will be denied. That move will definitely hurt some manufacturers that relied on exporting things to ZTE, but pinching ZTE like this will certainly hurt them more.

Not only is this going to hamper ZTE’s smartphone business, but the bad press from this is certainly not going to help the Chinese company make waves in the US market.

source: Reuters

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