China’s ZTE Corp. said it has ceased major operating activities after U.S. authorities imposed a ban on the telecommunications gear maker’s ability to buy components from American suppliers.

The U.S. Commerce Dept. said last month that ZTE had violated the terms of a sanctions settlement and prohibited purchases of key American technology, including semiconductors from Qualcomm Corp. and optical components such as those from Lumentum Holdings Inc. ZTE, which had been fined for shipping gear to Iran and North Korea, rewarded employees engaged in the illegal conduct instead of punishing them, the department said.

ZTE has protested the ban and Chinese authorities have pursued negotiations with their U.S. counterparts. The incident has added to U.S.-China tensions over trade between the world’s two biggest economies.

“The company and related parties are actively communicating with the relevant U.S. government departments in order to facilitate the modification or reversal of the denial order by the U.S. government and forge a positive outcome in the development of the matters,” ZTE said in its statement to the Hong Kong stock exchange.

ZTE also said in the statement that it has sufficient cash and strictly adheres to its commercial obligations. Its shares have been suspended from trading since the imposition of the trade ban.

The blow comes just as ZTE was preparing to lead the country’s charge into the era of fifth-generation wireless technology, along with local rival Huawei Technologies Co. Major wireless carriers around the world are preparing spend billions on rolling out 5G networks, which enable new technologies from faster internet access to augmented reality. ZTE, which once harbored ambitions of vying with Apple Inc. in phones, has called the punishment “unacceptable” and threatened to take legal action.