No agreement yet between US, China on ZTE: Trump aide

ZTE has been banned from purchasing sensitive technology from the US over its illegal sales to Iran and North Korea

ZTE will also need to place $400 million in escrow to cover any potential future regulation violations.

Ross said the US will install its "own compliance people" to monitor the company, and shareholders will bring in new management and board.

USA companies could soon be cleared to do business with China's ZTE, according to Reuters.

ZTE had previously violated USA sanctions on North Korea and Iran. The Trump administration had previously announced that it was banning USA companies from selling ZTE components for seven years, components critical to its entire product line. Both companies' share prices rose Thursday, with NXP up more than 6 percent in midday trading.

The Senate measure would restore penalties on ZTE for violating export controls and bar USA government agencies from purchasing or leasing equipment or services from ZTE or Huawei Technologies Co Ltd [HWT.UL], another major Chinese firm. "Export control and sanctions laws should not be negotiable, because fidelity to the rule of law is a key part of what distinguishes the USA from a country like China that is ruled by a Communist dictatorship".

For the last month, Chinese smartphone giant ZTE has been largely shut down after the Trump administration banned USA firms from selling it technology. The first sanctions followed a probe into illegally shipped equipment to Iran and North Korea. The ban also hurt American companies that supply ZTE.

China warns USA against tariffs as trade talks end
French Finance Minister Bruno Le Maire referred to the "G6 plus one" and expressed "total incomprehension" over the U.S. actions. He blames what he calls their abusive trade policies for America's persistent trade deficits - $566 billion past year .

"The President just caved on a deal with ZTE, a Chinese company that our intelligence professionals say poses a national security threat", Rep. Adam Schiff (D-Calif.) tweeted.

"I closed it down then let it reopen with high-level security guarantees, change of management and board, must purchase US parts and pay a $1.3 Billion fine", Trump wrote on Twitter on May 25.

There was no immediate comment from the Chinese government on the ZTE agreement. The company has 20 USA offices or research centers and has sponsored five National Basketball Association teams.

U.S Senate Democratic leader Chuck Shumer quipped, "By letting ZTE off the hook, the president who roared like a lion is governing like a lamb when it comes to China. #VeryBadDeal", Republican Senator Marco Rubio of Florida said on Twitter after the administration's announcement. The U.S. government has not signed the deal yet, however, ZTE has agreed to a previously drawn up deal. ZTE went into a tailspin, saying last month that it had shut down major operations. To satisfy Trump's demand for a reduction in the $375 billion in goods US trade deficit with China, the government in Beijing has reportedly offered to buy up to $70 billion more each year in USA products.

"The hope is accommodating China's concerns on ZTE will open the door to favorable decisions on Qualcomm and other deals", said Altbach. Oclaro got 18% of its business from ZTE previous year, while 30% of Acacia's total revenue was from ZTE.

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