So it can update phones and other equipment
The US Commerce Department has temporarily lifted a portion of the ban on ZTE that all-but shut down the company almost three months ago. After paying a $1 billion fine, ZTE has been authorized by the United States to continue supporting much of its already deployed equipment and consumer devices. This largely seems designed to keep infrastructure up and running and allow ZTE to deliver security patches to its phones (and other products).
The eased restrictions are temporary, only lasting until August 1st. It’s not stated what will happen after that point, but Bloomberg reports that ZTE is expected to be in full compliance with the agreement it made with the US government by then, meaning the ban may be fully lifted. ZTE initially received the ban in April as repercussion for failing to follow through with penalties it received for violating US sanctions to Iran and North Korea.
ZTE has largely been dormant since being hit with a trade ban over two months ago, since it’s been unable to procure necessary parts and software needed to operate its business and sell products. The Commerce Department’s order should allow ZTE to at least partially resume operations, though it appears to be narrowly targeted to really only allow for maintenance and the benefit of customers, and not deployment of new products. By and large, the trade ban is still in place.
That all said, there’s still a chance none of this will happen, or that things will go a little differently than everyone’s planned. The Senate overwhelmingly voted to reinstate the ban on ZTE last month. That measure still has to make it through a conference with a House version of a larger piece of legislation, which didn’t go nearly as far to punish ZTE. If it remains, the deal may be moot; if it gets stripped out, then it sounds like ZTE should be operational again by the end of the summer.
Putting additional drama over all of this is the fact that President Trump decided to get personally involved and push for the US to cut a deal with ZTE to get its business going again. Despite that, many Republicans (and Democrats, too) seem wary of ZTE and other Chinese telecom companies, like Huawei, and view them as potential security threats due. Some Republican Senators immediately pushed back on the deal — leading to the vote mentioned above — and the Federal Communications Commission is even considering an item that would limit purchases of equipment from companies that pose a “national security risk,” which is really just their way of saying “Huawei and ZTE.”