US move against ZTE will hurt US companies: media

The U.S. Department of Commerce announced a market-shaking decision on Monday to deny export privileges against ZTE, a leading Chinese telecom equipment company. [File photo: China Business News/IC]

The move by the U.S. Department of Commerce to ban exports to Chinese telecom manufacturer ZTE has been criticized by several leading global news organizations. They warn that it has the potential to cause huge losses for companies in the United States.

Deutsche Welle has even gone so far as to call the move an exercise in protectionism.

Reuters says that leading American chip manufacturer Qualcomm faces a substantial hit, as it is currently the largest supplier of chips for ZTE smartphones. In 2017, ZTE reportedly shipped around 46 million smartphone handsets.

Some of the suppliers of ZTE in the United States have already experienced huge falls in their share price. Acacia Communication Inc., an optic fiber equipment manufacturer in Massachusetts that trades with ZTE, has already seen its share price fall by more than 30 percent, according to the BBC.

Telecom carriers in the United States will also be directly affected by the sanctions, with Die Welt reporting that ZTE sells smartphones through AT&T, T-Mobile, and Sprint.