Roundup: U.S. experts warn sanctions against ZTE will hit U.S. companies hard

Recent U.S. restrictions against Chinese telecommunication equipment maker ZTE Corp. would hurt its U.S. suppliers severely, U.S. experts have warned.

If the U.S. Commerce Department decides to restrict U.S. tech companies from selling products to ZTE, it is a case of "cutting off our nose to spite our face," Robert Atkinson, president of U.S. Information Technology and Innovation Foundation, said in an interview with Xinhua on Tuesday.

The U.S. Commence Department said Monday that the Chinese tech giant will be under restrictions owing to its alleged violation of the U.S. export controls on Iran.

The department said that U.S. companies are only allowed to export American-made equipment or parts to ZTE with official licenses under a "policy of presumption of denial," which indicates that winning the approval would be nearly impossible.

"If the Department of Commerce restricts exports of U.S. technology suppliers to ZTE, one effect will be to reduce U.S. technology exports, which will hurt U.S. jobs and longer-term competitiveness," Atkinson said.

ZTE, a provider of mobile devices and telecommunication systems, has been operating in the United States since 1998. The Chinese company has become the fourth largest smartphone supplier in the country and has built partnerships with many U.S. companies, including major chipmakers such as Qualcomm, Broadcom and Intel.

Analysts said all the big-name chipmakers mentioned above would be affected by the sanctions against ZTE. Qualcomm alone could lose nearly 40 million U.S. dollars in its quarterly sale to ZTE, according to media reports.

Qualcomm and Intel spokespersons declined to comment when contacted by Xinhua.

Other U.S. suppliers such as providers of optical and wireless components could also be hurt by the export restrictions.

Oclaro, a U.S. seller of optical components, modules and subsystems, said in a statement on Tuesday that "ZTE purchases multiple products from Oclaro" and that "revenues from ZTE are projected to exceed 10 percent in Oclaro's third fiscal quarter of 2016. Oclaro currently expects its results for the third fiscal quarter to be at the low end of the guidance ranges."

Experts believe the U.S. government should take a second look at the ZTE case given the mutual interests involved.

"Both countries would benefit if their trade relations were more reciprocal," said James Andrew Lewis, senior fellow of the Center for Strategic and International Studies.

Lewis told Xinhua on Tuesday that ZTE represents a problem the United States has had with other Asian economies as they grow, and "now that China is so important (that) it needs to take a second look at reciprocity."

China's Ministry of Commerce on Tuesday also expressed opposition to the sanction against ZTE, saying: "The U.S. move will severely impair normal commercial activities of Chinese firms. China will continue to engage with the U.S. side on the issue."

"ZTE has created tens of thousands of jobs in the United States through trade and investment cooperation with hundreds of local enterprises," the ministry said.

Atkinson said that restrictions would hurt related U.S. suppliers, and "this all points to the continued need to reform U.S. export controls to liberalize the exports on non-sensitive technologies." Endi