ZTE’s loss could be a gain for US-China trade relations
The telecoms firm’s compliance with a huge fine for violating US sanctions on North Korea and Iran may have helped avoid a potential political flashpoint
Even so, let this be a big lesson for Chinese companies wanting to do business in the US. You must follow other people’s laws when you are in their country, just as Beijing expects foreign firms to follow Chinese laws.
There was an element of cloak and dagger in the whole case, as a big break for US investigators came when a ZTE insider tipped them off, leading to the seizure of a laptop reportedly full of incriminating files from the husband of a company lawyer at an airport in the US.
While other financial institutions found guilty of money laundering for Iran and North Korea had faced higher fines, as a proportion of profits, they were equivalent to no more than one or two quarters of earnings.
It appears the Trump White House and the US Commerce Department have made good on the president’s tough talk on trade. This is despite the fact that the case was mostly prosecuted when Barack Obama was still president.