Chinese smartphone maker ZTE barred from US technology

By TechnologyFOXBusiness

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The U.S. and British governments are telling companies to steer clear of Chinese smartphone maker ZTE.

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The Commerce Department said Monday it will prohibit American companies from selling products to ZTE, which violated the terms of a deal made after the U.S. alleged that ZTE skirted sanctions against North Korea and Iran.

The move will sever business dealings between ZTE and U.S. firms for up to seven years. Some ZTE smartphones sold in the U.S. are equipped with Qualcomm chips.

Shares of Qualcomm fell 1.7% on Monday.

Separately, cybersecurity officials in the U.K. warned mobile carriers to avoid using ZTE equipment because of concern that China could use the technology to infiltrate telecommunications infrastructure.

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The warning resembled similar concerns about Huawei, which has drawn the ire of congressional lawmakers. Last year, AT&T pulled out of negotiations to sell Huawei phones in the U.S. amid pressure over national security concerns. The Federal Communications Commission has proposed a new set of rules to restrict ZTE, Huawei and other Chinese firms from offering their products through U.S. mobile companies.

QCOMQUALCOMM INC.85.07-1.76-2.03%

In a Fox News op-ed, Sen. Tom Cotton, R-Ark., and FCC Chairman Ajit Pai said a hostile nation such as Russia or China “could use these backdoors to spy on Americans or attack our critical infrastructure by injecting viruses or launching denial-of-service attacks.”

The ban targeting ZTE comes as the U.S. considers tariffs on up to $150 billion in Chinese imports as President Donald Trump tackles what he has said are unfair trade practices by Beijing.

Also, the U.S. and U.K. warned Monday that Russia-backed hackers are targeting millions of routers used by individuals and businesses worldwide in preparation for future cyberattacks.

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