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ZTE of China to Pay $1B Fine in Deal to End U.S. Sanctions
- sjg007 8y agoIvanka got her patents apparently.
- otoburb 8y agoYou may be referring to the seven[1] or more[2] trademarks, not patents, that China recently awarded to Ivanka. [1] https://www.nytimes.com/2018/05/28/business/ivanka-trump-china-trademarks.html https://www.nytimes.com/2018/05/28/business/ivanka-trump-chi... [2] https://www.washingtonpost.com/opinions/ivanka-collects-her-chinese-trademarks-and-it-seems-ethics-arent-on-brand/2018/05/30/ed8d4a72-6433-11e8-a69c-b944de66d9e7_story.html https://www.washingtonpost.com/opinions/ivanka-collects-her-...
- deleted 8y ago[deleted]
- devy 8y agoYou'd be naive to think if ZTE were to go under will be at America's best interest. U.S. semiconductor industry as a whole will be impacted as ZTE is one of the largest mobile handset and networking equipment manufacturer.
- deleted 8y ago[deleted]
- silverbax88 8y agoRight, because when a supplier for anything that has a massive market goes out of business, no one has ever come in to serve that market...
- sigmar 8y agoAgreed. Their 3% market share would be arbsorded into Xiaomi, Samsung, and Huawei within months.
- devoply 8y agoImagine assets that could be bought at a discount.
- anilshanbhag 8y agoWell sure lets put 28000 people out of their jobs. It's a perfectly good company with a bad management. Management is being replaced, fine is levied, enforcement is done to prevent future mistake, life goes on.
- O1111OOO 8y ago> lets put 28000 people out of their jobs Minor correction: I keep seeing totals around 75,000 jobs[0] though I'm not sure if it includes all their subsidiaries[1] - some of which are classified as associates. [0] https://www.statista.com/statistics/233051/number-of-employees-at-zte-corporation/ https://www.statista.com/statistics/233051/number-of-employe... [1] https://en.wikipedia.org/wiki/ZTE https://en.wikipedia.org/wiki/ZTE
- tedsanders 8y agoDo you know of any analysis on the projected impacts? On the one hand, ZTE buys a lot of semi components from the US, and if ZTE craters, those sales disappear. But on the other hand, if ZTE craters, then other NEMs and handset makers would presumably replace those sales. The thousands of 5G base stations that AT&T and friends are building are still going to get built whether it's ZTE or someone else supplying the components. So if ZTE disappears, it's not like demand for the low-level components disappears too - in theory, those demanded supplies should just get rerouted through other intermediate suppliers, right? So to first order, I'd think the the effects would be zero. To second order, maybe there would be changes in supplier mix, as Huawei's favorite supplier gains relative to ZTE's favorite supplier. And maybe the loss of ZTE does cause some near-future work to be delayed, shrinking the short-term market slightly. And maybe the loss of a player concentrates more market power in the ZTE-level of the supply chain, drawing profits from the carriers above and the component makers below. And of course there will be costs caused by rerouting supply chains and inventories and the uncertainties therein. But I have no clue how marginal or substantial those second-order costs might be.
- fspeech 8y agoFor the same reason it is surprising that the Chinese government would not let ZTE go under. Without ZTE, Huawei would likely be able to charge higher prices around the world. ZTE's know-how and business relationships can be sold off to other domestic entities. The employees of ZTE will find jobs elsewhere. The failure of ZTE would then set an example to other Chinese companies for being dependent on US suppliers. If the failure of ZTE is not necessarily a loss to the Chinese government, we can infer that it is not necessarily a gain to the US government, as the gp claimed but using the logic of zero-sum.
- adventured 8y agoThe only reason the US is concerned with saving ZTE from going under in this instance, is as a favor-trade with China (they sign off on Qualcomm-NXP, the US gets to conclude eating an important EU company). It acts as an overall goodwill exchange in the midst of the trade deal positioning.
- tropo 8y agoHey, fair is fair. Your "important EU company" ate up Freescale and VLSI Technology, both of which were important US companies. We're just taking our stuff back.
- prklmn 8y ago“Too many jobs in China lost” - Xi’s waterboy and president of the USA
- spoiledtechie 8y ago1.4 Billion in penalties. I don't see any other President of the USA doing that. Its a WIN for us.
- ntnn 8y ago... the US armed forces are spending roughly 2b every day (~590b in 2015, proposed ~680b in 2019). That penalty is a drop on a hot stone. That's not a "WIN".
- kansface 8y agoWhy is the budget of the US armed forces the point of comparison here?
- everybodyknows 8y agoBecause ZTE is a prime instrument of PRC hegemonic ambitions, and $1B is a bargain to put such an asset back on line.
- spoiledtechie 8y agoI don't understand why you bring in the military budget. I could do the same with welfare, as it greatly outnumbers military spending even though its no where in our constitution or bill of rights to offer such. Remove your personal issue and think about this rationally please.
- mikeash 8y agoYou don’t see any other President doing that? This doesn’t even make the top 10! https://learn.censible.co/risky-business-top-ten-corporate-crackdowns/ https://learn.censible.co/risky-business-top-ten-corporate-c...
- martythemaniak 8y agoTrump's flipping around shouldn't be that surprising, but the wholesale abandonment or banishment of any independent thought from the Republican party is quite a (terrible) thing to behold. They claimed they were for "law and order" but the stand firm behind a criminal and want to take down the FBI and other agencies. They were for standing up to tinpot dictators, but are now fighting over who can suck up to Kim the best. They claimed they were for free trade and smooth business, but are now working hard to wreck the Western alliance. And let's not even try to get into the whole "family values" scam...
- drak0n1c 8y agoI suppose one man's successful negotiation is another man's reason to launch into a digressive rant.
- mbroncano 8y agoPeace for our time!
- martythemaniak 8y agoAnd I suppose one man's "successful negotiation" is another man's "fragile egomaniac taken advantage of again". Much like his inaugural Carrier "negotiation", these things tend to fluff his ego, benefit the other party and somehow leave everyone else worse off.
- throwaway7312 8y agoEver notice how Republican presidents are always portrayed by partisan liberals as blithering idiots (Bush II as a religious fundamentalist warmonger dunce; Trump as an narcissistic ADD loose cannon dunce)? And how Democrat presidents are always portrayed by partisan conservatives as morally corrupt degenerates (Clinton as a murdering, philandering drug kingpin; Obama as a Kenyan-born Muslim homosexual on globalist puppet strings)? Usually I just assume this is confirmation bias + partisans being partisan. But sometimes I like to wonder, "What if it's all true?"
- jorblumesea 8y agoI love how we are slapping sanctions on our allies and letting our adversaries in the backdoor. All the while complaining about IP theft from China. Sad!
- Hasknewbie 8y agoExactly this. It's insane that the US is threatening EU companies for (currently, legally) doing business in Iran, while at the same time letting ZTE get away with, well, having done the same thing (except illegally, when the sanctions were still in place). And all of that to save "many jobs"... in China.
- adventured 8y agoZTE didn't get away with anything. The US action against them nearly destroyed the company and they've been fined $2.2 billion. As of right now, if all the US has done is threaten sanctions on EU companies, then it's ZTE that has received the dramatically worse outcome.
- Hasknewbie 8y agoZTE objectively got punished with a lot less than what was meant. They got away with a lot, while the US chickened out. And EU companies will lose a lot more than a billion (caused by the US breaking an international treaty).
- bluesroo 8y agoThe US did not break an international treaty. It was a "deal" from Obama, which he never put in front of the Senate to actually become an international treaty... Likely because the Senate would not have confirmed it as it was.
- dashundchen 8y agoMeanwhile, a Chinese state investment puts $500 million dollars towards an Indonesian project heavily involving Trump properties, golf courses and branding. https://www.nationalreview.com/news/china-contributing-500-million-trump-linked-project-indonesia/ https://www.nationalreview.com/news/china-contributing-500-m... Peddling influence and using government for personal profit seems par for the course in this administration. https://www.salon.com/2018/05/16/trumps-bizarre-zte-tweets-payback-for-a-huge-real-estate-deal-in-indonesia/ https://www.salon.com/2018/05/16/trumps-bizarre-zte-tweets-p...
- genericone 8y agoChina knows how to play the game. They know that their investment won't stay under wraps... so I don't see how this would benefit Trump. Could the trump organization have rejected China's investment into the Indonesian state project if they wanted to stay clean? Or would that require dropping out of the entire project completely, and what would the contract violation terms have entailed if they were as major a part of that project as it seems? Would the contract violation agreement result in greater than 500M losses? There are very interesting political games afoot.
- nimish 8y agoIn this case the "game" is outright corruption and quid pro quo. This is not a game without consequence.
- martythemaniak 8y ago> I don't see how this would benefit Trump It puts money in his bank account. Of all the things to understand, this seems like it should be the easiest.
- mikeash 8y agoAll of your questions demonstrate why the President should never be in that situation in the first place. That Trump wasn’t instantaneously impeached for enormous ongoing conflicts of interest is a stain on Congressional leadership.
- pobo 8y agoThe fine will be used to educated and nurture so many US labors. Look what our president negotiated for us. MAGA. From mid west.
- martythemaniak 8y agohttps://en.wikipedia.org/wiki/Poe%27s_law https://en.wikipedia.org/wiki/Poe%27s_law
- yonkshi 8y agoThat's assuming if China doesn't do something equally punishing to a US company. China can serious cripple US's race to 5G if they halted Qualcomm ops in China
- wyattk 8y agoI'm from the rural Midwest. It may seem pedantic, but _no one_ from the Midwest uses a space in the name. That and the spelling errors reinforce that this is just an inflammatory bait comment.
- RyanZAG 8y agoI'm not from the rural mid west, but no one from the mid west uses underscores for emphasis. But seriously, there are 65 million people living in the US midwest. I can promise that thousands of you guys use 'mid west', underscores, italics, and just about everything else.
- pobo 8y agoI am actually from coastal cities. I shouldn't use the word `midwest` to hurt your feelings. Sorry about that. But I do hope that some of that money will get funneled into reviving the Midwest states and also the northern states that is struggling. From Mars.
- djrogers 8y agoSo the outcome here is: - All key leadership and board memebers are to be fired and replaced within 30 days - US picked compliance team embedded in ZTE that the commerce department is reimbursed for by ZTE - $1B fine and $400M in escrow - Qualcomm / NXP deal seems likely to be approved, helping US jobs In the past we've seen other countries deal with Iran while under sanctions, and we've gotten nothing out of them other than speeches at the U.N. I kinda think I like this better. oblig disclaimer - I didn't vote for Trump, and I don't knee-jerk defend his actions...
- ejstronge 8y ago> In the past we've seen other countries deal with Iran while under sanctions, and we've gotten nothing out of them other than speeches at the U.N. > I kinda think I like this better. I think this is immensely unfair - you cite one deal that got a lot of press due to a series of unexpected about-faces in the US position. There’s no reason to believe that agreements of this nature are made but not publicized. Also, I'm not sure I understand how this action relates to the sanctions placed on Iran. What is your reasoning?
- djrogers 8y agoI used the term sanctions in the broad sense when I could have used a more specific term, but I was referring to the trade and technology transfer restrictions (which fall under the generic umbrella of sanctions) that ZTE violated.
- charlesdm 8y agoJust wait until the next time when China holds the keys to decide on an important matter. It'll be interesting to see how this eventually plays out, but maybe you won't like it better then.