ZTE can once again do business with American companies

What did ZTE actually do wrong?
What did ZTE actually do wrong?

The United States has officially lifted its crippling export ban on Chinese company ZTE, easing one point of contention with Beijing amid an otherwise escalating trade fight.

The US Commerce Department said Friday that it's letting ZTE, which makes smartphones and telecommunications equipment, resume buying components from American companies.

The Commerce Department reached a deal with ZTE last month, agreeing to lift its ban after the company paid a $1 billion fine and put $400 million in an escrow account. The fine was paid in late June, and Ross said Friday that the $400 million had arrived at a US bank.

ZTE also agreed to bring in an American monitoring team and overhaul its top management as part of the deal. It recently named a new CEO and replaced its entire board to meet US demands.

The Commerce Department said Friday that these measures were the "harshest penalties and strictest compliance measures ever imposed in such a case."

"While we lifted the ban on ZTE, the Department will remain vigilant as we closely monitor ZTE's actions to ensure compliance with all US laws and regulations," Commerce Secretary Wilbur Ross said in a statement.

ZTE has been in crisis since the United States first blocked it from buying US parts in April. The Trump administration said that ZTE had lied to US officials about punishing employees who violated US sanctions against North Korea and Iran.

The export ban forced ZTE (ZTCOF) to halt almost all of its operations, putting the company's future in doubt. It also fanned tensions between the Chinese and American governments as they sparred over tariffs, market access and alleged intellectual property theft.

Related: Where's ZTE? Execs go AWOL at China's big smartphone fair

The ZTE deal remains controversial on Capitol Hill. Members of Congress from both parties have lobbied to keep the ban in place, citing national security concerns.

And the Trump administration has yet to resolve other issues in its trade war with China.

US tariffs on Chinese goods worth $34 billion, and Chinese tariffs on US goods worth an equal amount, went into effect last week. President Donald Trump has said he's prepared to put tariffs on as much as $450 billion worth of Chinese exports.

Personal Finance

CNNMoney Sponsors