The US is apparently planning on adding various Chinese companies to its trade blacklist today (18th December 2020). This would also include China’s largest chipmaker SMIC, as per two sources close to the matter.
According to a Reuters report, the move is the latest from the Trump administration’s efforts against China. Notably, it arrives just a few weeks before the Democratic President Elect Joe Biden takes the office, on January 20. As per the sources, the US government is aiming to add around 80 additional companies and affiliates to the ‘Entity List,’ which mostly comprises of China based firms.
Furthermore, the US Department of Commerce is also expected to designate some of these Chinese companies as allegedly having ties to China’s military, or are aiding in the construction and militarization of artificial islands in the South China Sea. Some of the companies even have allegedly been involved in human rights violations, as per the source. At the moment, the Trump administration has added more than 275 China based companies and their affiliates to the Entity List to target key Chinese industries.
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This most notably includes Huawei Technologies and ZTE, two major consumer electronics and telecommunications equipment providers. Now, even SMIC is reportedly the latest target for Washington, as the Commerce Department previously mandating suppliers to the company to apply for export licenses after stating that there was an “unacceptable risk” with its equipment being possibly used for military purposes.
Unfortunately, SMIC, the Commerce Department, or even the Chinese Embassy in Washington has yet to respond to this report. Similar to other Chinese firms, SMIC has denied the accusations of ties to China’s military. If the chipmaker is put on the Entity List, the company would be forced to seek a special license from the Commerce Department before being supplied with key components or materials from US based firms.
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