(REUTERS) — The U.S. Department of Commerce has banned American companies from selling components to leading Chinese telecom equipment maker ZTE Corp for seven years for violating the terms of a sanctions violation case, U.S. officials said on Monday.

The U.S. action, first reported by Reuters, could be devastating to ZTE since American companies are estimated to provide 25 percent to 30 percent of the components used in ZTE’s equipment, which includes networking gear and smartphones.

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