"What I envision is a very large fine of more than $1 billion. Could be $1.3 billion. I envision a new management, a new board and very, very strict security rules," Trump told reporters at the White House.
However, ZTE agreed last year to pay $1.19 billion in penalties for alleged illegally shipping telecommunications equipment to Iran and DPRK.
Meanwhile, the US Department of Defense said earlier that it would ban the sale of phones manufactured by ZTE at its military bases around the world due to concerns that Beijing allegedly could hack into phones for intelligence-gathering purposes.
On May 13, US President Donald Trump wrote on Twitter that he was working with Chinese President Xi Jinping to let ZTE "get back into business, fast."
Earlier on Tuesday, US media reported that both countries may reach the deal on this issue that would see Washington lift its ban.