US Commerce Secretary Wilbur Ross, who announced the deal, reiterated a denial that there was any connection between the two. When U.S. regulators found that ZTE had not complied with the terms of the agreement, they cut off the firm from its U.S. parts suppliers.
In April, the commerce department barred ZTE from importing American components for seven years, having concluded that it deceived United States regulators after it settled charges last year of sanctions violations.
First published June 7, 5:31 a.m. PT Updates, 5:54 a.m.: Adds background; 8:26 a.m.: Includes comment from Commerce Department release; 11:09 a.m: Adds ZTE declining to comment.
In a statement, the Commerce Department said the actions represent the "most severe penalty" it's ever handed down. The gear maker pleaded guilty past year in federal court in Texas for conspiring to violate US sanctions to Iran.
The fine announced today comes on top of $892 million ZTE has already paid for breaking USA sanctions by selling equipment to North Korea and Iran.
As part of the deal, ZTE has also reportedly promised to replace its board and executive team in 30 days. The company allegedly paid bonuses to employees who violated the sanctions, while telling American counterparts that those employees had been disciplined.
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The U.S. government has always been concerned with possible national security threats posed by ZTE and Huawei.
Senate Democratic leader Chuck Schumer called the agreement "a 180-degree turn away from the president's promise to be tough on China".
Rubio alluded to Trump's steel tariffs, but the Florida senator hasn't been more vocal since Trump levied those - an issue that is playing out in Florida.
The clash raised the prospect that Trump's own Republican party could work to undermine key planks of his trade agenda.
Ross insisted the ZTE deal was an enforcement matter unrelated to the trade talks, which he has led.
Trump wants to use the trade negotiations to recoup massive losses to the American economy from decades of intellectual property theft and forced technology transfers by China's communist regime. "They've never really pushed back", he told CNBC.
But Ross's denial appeared to conflict with Trump's own public statements. USA goods exported to China a year ago totaled $130 billion while Chinese imports to the US totaled $506 billion.
A man walks past a building with the ZTE logos in Beijing. The order effectively cut off the company off from receiving most United States technology, and as a result of this ban, ZTE's operations, which heavily relied on importing both hardware and software from the U.S., ground to a halt, putting the future of the company in doubt.