With the sanctions, US firms that work with ZTE like Intel, Microsoft and Qualcomm will be forced to apply for export licenses to ship anything to the company. Such applications will "generally be denied," according to the US commerce department.

We hope the US stops this erroneous action and avoids damaging Sino-US trade cooperation and bilateral relations

ZTE says that it's "highly concerned" about the sanctions, and that it has cooperated with the US since reports of trade with Iran first surfaced in 2012. The company makes not only mobile handsets like the Axon targeted at US and European consumers, but is also a significant supplier of telecom equipment around the world. An analyst told Reuters that "we believe the restrictions, if implemented, will cause significant supply problems to ZTE."