ZTE could be the first casualty in the escalating trade wars between the US and China
Chinese smartphone giant ZTE has ceased its manufacturing operations, according to a company statement. ZTE was hit with a banning order by the US which prohibited it from selling its products in the US and, crucially, banned it from doing business with any US based firm. The banning order has essentially decimated ZTE’s production line and supply chain.
“As a result of the Denial Order, the major operating activities of the Company have ceased,” ZTE said in a Stock Exchange filing.
The announcement comes amid fears of an escalating trade war between the US and China
, and follows a slew of trade tariffs and penalties introduced by the US government against a wide range of Chinese companies. ZTE is said to be in negotiations to try and reverse the ban and will continue to operate as a company, despite the halt in production.
“As of now, the Company maintains sufficient cash and strictly adheres to its commercial obligations subject to compliance with laws and regulations,” the statement read.
ZTE is a key player in smartphone handset manufacturing in Asia and Africa, where it has begun to gain ground on the world’s big 3 producers (Apple, Samsung, Huawei).