China’s ZTE asks US to suspend sales ban

China's ZTE asks US to suspend sales ban

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ZTE (ZTCOF) said it has submitted a request for the US Commerce Department to put on hold an order forbidding American firms from selling parts and providing services to it.

The Chinese company, which sells smartphones and telecommunications equipment around the world, has found itself caught up in a tense US-China trade fight.

The Commerce Department said it slapped the seven-year export ban on ZTE because the Chinese company lied to American officials about punishing employees who violated US sanctions on North Korea and Iran.

But the crackdown has been widely interpreted as part of a broader push by the United States to stifle China’s tech ambitions.

ZTE is not officially part of the dispute over intellectual property that’s fueling the US-China trade clash, but it “represents the same nexus of tech and national security issues,” Eurasia Group director Evan Medeiros wrote in a research note last week.

Related: China says ‘big differences’ remain after US trade talks

Beijing specifically brought up the restrictions on ZTE during high level trade talks between US and Chinese officials last week. The Chinese government said it lodged “solemn representations” with the United States over the ban.

ZTE has said the US export ban is a massive disruption to its business, with Chairman Yin Yimin calling it unfair and unacceptable. The company relies on US firms for key smartphone components, including microchips from Qualcomm (QCOM) and glass from Corning (CNIG).

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ZTE said in its latest statement, which was filed late Sunday with the Hong Kong stock exchange, that it has submitted additional information required by the Commerce Department.

The Commerce Department did not respond to a request for comment outside of business hours.

US concerns over Chinese tech and national security are a recurring problem for ZTE and Huawei, another huge Chinese company that makes smartphones and telecommunications equipment.

In February, US intelligence agencies warned Americans against buying ZTE and Huawei phones, saying the companies posed a security threat to American customers.

Huawei is effectively shut out of the United States, but ZTE has made significant inroads there. The company accounted for 10% of the US smartphone market last year, making it the fourth largest supplier, according to market research firm Counterpoint Technology.

ZTE shares, which trade in Hong Kong and Shenzhen, have been suspended since the Commerce Department announced the ban last month.

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