Back in 2016, ZTE was accused of dodging United States sanctions on Iran. Even though ZTE is based in China, it was selling technology from the United States to Iran using multiple shell companies. The US Department of Commerce threatened to cut off ZTE from all its supply chain partners in the US, which ZTE avoided by paying nearly a billion dollars in fines.
The Department of Commerce announced today that all American companies are now banned from selling components to ZTE, due to the company violating the terms of the sanctions case. Specifically, ZTE agreed to fire four senior employees and discipline 35 others. The company admitted in March that it had not disciplined or reduced bonuses to the 35 other employees.
The current ban will be in effect for the next seven years, and will undoubtedly cripple the company. Qualcomm is a US-based company, meaning ZTE phones will not be able to use Snapdragon processors. In other words, the Axon 7 probably won’t get a sequel, unless the company switches to MediaTek chips. ZTE will still be allowed to sell smartphones in the United States, at least for now.
Alternate title: Shop till you drop a trade embargo: ZTE can’t buy parts from US companies anymore