China denounces US export restrictions on smartphone maker ZTE

From Tuesday, export restrictions will apply to all companies that want to sell American products to the Chinese manufacturer ZTE. These would be the result of ZTE’s violation of an embargo against Iran. China calls for the measure to be removed.

Due to the worldwide restrictions, ZTE’s suppliers must first apply for an export license before they can send parts to the telecom company. Reuters further reports that the Chinese Ministry of Foreign Affairs is angry about the measure and disagrees with the fact that the US is invoking national laws to target Chinese companies.

The ministry’s spokesperson also told Reuters that the US could harm the trade relationship between the two countries. As a result of the news, ZTE shares trading on the Chinese trading floor has already been halted. The company is the fourth largest smartphone seller in the US with a market share of seven percent, The Wall Street Journal reports.

The paper goes on to say that the restrictions are likely to have a major impact, as ZTE relies on Qualcomm and Intel to supply chips for some smartphone models. The manufacturer may switch to products from Taiwanese MediaTek.

The embargo against Iran prohibits the sale of American products to that country. ZTE allegedly violated this embargo by planning to re-export certain products to Iran. There was already talk of an investigation into ZTE by the US in 2012.