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ZTE reportedly expects at least $3 billion in losses due to US ban

Employees sit idle as customers renege on deals, Bloomberg reports.

CHINA-US-TELECOMMUNICATION-ZTE

Chinese telecom giant ZTE said its major operations had "ceased" following last month's US ban on American sales of critical technology to the company.

Johannes Eisele/AFP/Getty Images

ZTE expects to lose at least 20 billion yuan ($3.1 billion) in the wake of a US technology ban that has factories halting operations as clients cancel deals with the embattled Chinese phone maker, Bloomberg reported Tuesday.

ZTE, the fourth-largest smartphone maker in the US, has been dealing with a US Commerce Department denial order that prevents American businesses from selling hardware or services to the company. The seven-year ban, which forced ZTE to shut down its "major operating activities," followed the government's determination that ZTE violated terms of a 2017 settlement by failing to fire employees involved with illegally shipping US equipment to Iran and North Korea.

The ban has spooked customers, causing some to break already sealed deals, Bloomberg reported. The Shenzhen, China-based company has been spending an estimated 80 million to 100 million yuan in daily operational expenses, while most of its 75,000 employees sit idle, sources told the news outlet.

ZTE had been working to get the denial order overturned and had pegged its hopes on broader bilateral trade talks between the US and China. Earlier this month, President Donald Trump sent a surprising tweet on ZTE that called for the Commerce Department to find "a way to get back into business, fast."

However, the House Appropriations Committee unanimously approved an amendment to a bill that would uphold sanctions against the company, delivering a sharp rebuke to Trump.

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