China's ZTE edges closer to resuming business in US

Chinese tech giant ZTE has signed an agreement with the US clearing the way for it to resume business in the country.

Once ZTE makes a $400 million security deposit, an order to lift the ban will be issued, the US Commerce Department said.

ZTE was blocked from buying US parts in April after the US found it violated trade bans with Iran and North Korea.

The move comes as a US-China trade war is escalating., according to a BBC report Thursday.

"Once the ZTE has completed the $400 million escrow deposit, BIS will issue a notice lifting the denial order," the US Department of Commerce said on Twitter Wednesday, referring to the Bureau of Industry and Security.

ZTE, China's second largest telecoms manufacturer, depends on US-made components for the production of its handsets.

The ban forced the firm to suspend major operations, prompting China's President Xi Jinping to ask the US to reconsider the punishment.

In June, the US reached a deal with ZTE that would allow it resume full activities in the US if it met a range of requirements including: paying a $1 billion penalty, hiring a compliance team chosen by the US, replacing much of its management board and paying $400 million into a holding account to insure against future violations.