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White House's Navarro says 'three strikes you're out' for ZTE

Reuters  |  WASHINGTON 

By Price

(Reuters) - Chinese company will be "shut down" in the if it engages in one more bad activity, warned on Sunday.

ZTE last week agreed to pay a $1 billion fine to the and to overhaul its leadership in order to end a crippling ban on the Shenzhen-headquartered firm from buying parts from U.S. suppliers and allowing it to get back into business.

The ban, which traces back to a breach of the U.S. embargo on trade with Iran, had prevented China's second largest by revenue from buying the U.S. components it relies on to make

"It's going to be three strikes you're out on ZTE. If they do one more additional thing, they will be shut down," Navarro told Fox, adding that everyone within the administration understood this was the policy.

Navarro was speaking as arrived in for a historic summit with North Korean leader Un, whose regime is heavily dependent upon neighbouring communist ally

The introduced the ban in April because ZTE broke the terms of an agreement it had entered into with the after pleading guilty last year to conspiring to violate U.S. sanctions by shipping U.S. goods to

The ZTE sanctions became a key focus in trade talks between and Beijing, and a deal to lift the ban was struck as Trump sought concessions from in order to avoid a trade war between the world's two largest economies.

Prominent U.S. Democratic and Republican lawmakers last week introduced legislation to try to overturn the deal, saying ZTE posed a threat to America's national security.

On Sunday, Navarro said Trump's decision to allow ZTE to continue operating in the United States was a gesture to help build goodwill with

"The did this as a personal favour to the of China as a way of showing some good will for bigger efforts such as the one here in Singapore," said Navarro, referring to the summit between Trump and Kim.

He added that ZTE was a "bad actor" but that the deal included safeguards, such as requiring the company to retain a compliance team selected by the Commerce Department for 10 years. The company already has a U.S. court-appointed monitor.

(Reporting by Price; Editing by and Chris Reese)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Sun, June 10 2018. 21:17 IST