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China's ZTE Stock Prices Plummet After US Deal


FILE - Men pass by a building of Chinese tech giant ZTE, in Beijing, China, May 8, 2018.

Shares of embattled Chinese telecommunications giant ZTE plunged more than 40 percent Wednesday, its first day of trading after agreeing to pay a $1 billion fine to the United States for violating trade sanctions.

ZTE nearly went under after the Trump administration imposed a seven-year ban on the company from buying crucial software and hardware components for its smartphones and other devices from U.S. companies. The ban was punishment for ZTE putting U.S.-built components in its products and selling those goods to countries under a U.S. trade embargo, including Iran and North Korea.

The sanctions were lifted after ZTE agreed to pay a $1 billion penalty, put another $400 million in escrow, and replace its entire management and board by the middle of July.

The company is also required to hire a new compliance team selected by the U.S. Commerce Department for a 10-year term.

A bipartisan group of U.S. lawmakers have introduced legislation to reimpose the penalties on ZTE, saying the firm posed a threat to U.S. national security through intelligence gathering on its devices.

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