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US Bans American Companies from Selling to Chinese Phone Maker ZTE

The U.S. Department of Commerce has banned American companies from selling components to Chinese telecom equipment maker ZTE for seven years after breaking an agreement reached after it was caught illegally shipping goods to Iran, U.S. officials said Monday.

The U.S. action, first reported by Reuters, could be devastating to ZTE since American companies are estimated to provide 25 percent to 30 percent of the components used in ZTE’s equipment, which includes smartphones and gear to build telecommunications networks.

The ban is the result of ZTE’s failure to comply with an agreement with the U.S. government after it pleaded guilty last year …read more