Bernard Murphy
Moderator
ZTE facing export restrictions from US department of commerce for alleged trading with Iran in violation of US export controls
Trouble brewing for ZTE
- Thread starter Bernard Murphy
- Start date
Bernard Murphy
Moderator
Also this will likely have knock-on impact for QCOM
hist78
Well-known member
From the Reuters' news report:
U.S. Commerce Department to place restrictions on China's ZTE
| Reuters
"The restrictions will make it difficult for the company to acquire U.S. products by requiring ZTE's suppliers to apply for an export license before shipping any American-made equipment or parts to ZTE. According to a Commerce Department notice that will be published next week in the U.S. Federal Register, the license applications generally will be denied."
""We believe the restrictions, if implemented, will cause significant supply problems to ZTE," Jefferies analyst Cynthia Meng wrote in a note, adding that ZTE has major trading relationships with several U.S. companies including Qualcomm (QCOM.O), Microsoft (MSFT.O) and IBM (IBM.N)."
It sounds a very serious restriction and punishment. But wait a moment, who is US government trying to punish? ZTE or American companies? Some of those American companies' products can be easily replaced by other non-US products or solutions. For example Qualcomm is struggling today with many strong competitors worldwide. Obviously US government thinks it's not a big deal. So the long term effect is to encourage Chinese tech companies to use as less US products as possible!
U.S. Commerce Department to place restrictions on China's ZTE
| Reuters
"The restrictions will make it difficult for the company to acquire U.S. products by requiring ZTE's suppliers to apply for an export license before shipping any American-made equipment or parts to ZTE. According to a Commerce Department notice that will be published next week in the U.S. Federal Register, the license applications generally will be denied."
""We believe the restrictions, if implemented, will cause significant supply problems to ZTE," Jefferies analyst Cynthia Meng wrote in a note, adding that ZTE has major trading relationships with several U.S. companies including Qualcomm (QCOM.O), Microsoft (MSFT.O) and IBM (IBM.N)."
It sounds a very serious restriction and punishment. But wait a moment, who is US government trying to punish? ZTE or American companies? Some of those American companies' products can be easily replaced by other non-US products or solutions. For example Qualcomm is struggling today with many strong competitors worldwide. Obviously US government thinks it's not a big deal. So the long term effect is to encourage Chinese tech companies to use as less US products as possible!
Bernard Murphy
Moderator
Ah - there you have the magic of government practices not being designed for the global economy ... and carefully and very deliberately shooting itself in the foot. Some have said that the problem with government is not government per se, but it's inability to at the speed at which business adapts.
Bernard Murphy
Moderator
US now backing off a bit. Who knows what motivation - concern about instability in China economy, pushback from US vendors to ZTE (eg QCOM)..?
U.S. to offer China’s ZTE 'temporary relief' on export curbs: official
| Reuters
U.S. to offer China’s ZTE 'temporary relief' on export curbs: official
| Reuters