ZTE Deal Reached: US commerce secretary announces $1.4 bln settlement

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02:02

Chinese telecoms firm ZTE has been saved from collapse after Donald Trump kept his pledge to help. It'll mean some profound changes for a firm that's aroused heated accusations in the US, about intellectual property theft and espionage. Our correspondent Owen Fairclough has the story.

ZTE has been facing financial ruin since the U.S. banned suppliers from trading with it-the Chinese telecom giant caught in the trade crossfire between Washington and Beijing. The US has reversed the ban, but with tough conditions.

WILBUR ROSS US COMMERCE SECRETARY "We think this settlement, which brought the company, a 17 billion dollar company to its knees, more or less put them out of business. Now that they are accepting having this compliance team in, whole new management, whole new board, should serve as a very strong deterrent not only for them but for other potential bad actors."

ZTE will also have to pay a one billion dollar fine-having already paid nearly as much for breaching a settlement for violating sanctions.

It'll also have to put up another 400 million dollars of suspended fines in escrow - and in an unprecedented move, have the US selected monitoring team in place. U.S. President Donald Trump had pledged to help ZTE, whose 75,000 worldwide employees were at risk.

But lawmakers plan to introduce bipartisan legislation blocking Trump. Republican Senator Marco Rubio tweeting: "This "deal" with #ZTE may keep them from selling to Iran and North Korea but it will do nothing to keep us safe from corporate and national security espionage."

Both Republicans and Democrats contend tech firms like ZTE pose a threat by forcing its U.S. commercial partners to share their trade secrets. China denies this.