China's ZTE will be granted temporary relief from the trade ban imposed by the U.S. in a bid to ease tension between the two countries that began when the company was sanctioned earlier in March.
In a report from Reuters, the senior official revealed the plans of the U.S. government to ease restrictions on exportation of tech supplies from the Shenzhen-based company as long as it abides by its "commitments to the U.S. Government."
"As part of the effort to resolve the matter, and based upon binding commitments that ZTE has made to the U.S. government, Commerce expects this week to be able to provide temporary relief from some licensing requirements," the official explained.
Detailed information about the said plan has yet to be revealed but is expected to be thoroughly explained and published in the Federal Register.
According to Reuters, the Chinese company participated "in active, constructive discussions" with the U.S. department officials for the past few days in order to remedy the dilemma that has put a tension on the warming U.S.-China relations.
Reuters explained that the "temporary relief" entails the approval of application of export licenses involving ZTE, which should generally be denied under the imposed trade restrictions.
However, the Department of Commerce official clarified that the company will be granted such as long as it abides by its "commitments" with the American government.
Meanwhile, ZTE expressed its commitment to the resolution of the issue and said that they had been "actively cooperating with relevant U.S. departments," per a report from The Wall Street Journal.
"We will keep communicating with relevant parties to resolve the issue as soon as possible," it declared in a statement released on Monday.
The trade restrictions imposed by the U.S. government had immediate effects on ZTE's performance, resulting in the company's shares in Hong Kong dropping to HK$14.16.
Because of the restrictions, the company had also decided to postpone the release of its annual results report and board meeting to further determine the effects of the matter on the overall business.