China is threatening to “restrict or investigate” several major U.S. companies, such as Boeing and Apple, in retaliation against U.S. action Friday to block shipments of semiconductors to the Chinese company Huawei.
The Chinese state media outlet Global Times reported that China is preparing to place U.S. companies on an “unreliable entity” list after the Trump administration blocked the shipment of computer chips to Huawei.
“China will take forceful countermeasures to protect its own legitimate rights,” a Chinese government source told the Global Times, if the U.S. continues with its plan to block chip suppliers, including Taiwan-based TSMC, from selling chips to Huawei.
Companies placed on the “unreliable entities” list could be restricted from exporting their goods to China and investigated by Chinese authorities.
Hu Xijin, the Editor in Chief for the Global Times, further elaborated on the threat to U.S. companies following the Trump administration’s trade action.
“Based on what I know, if the US further blocks key technology supply to Huawei, China will activate the “unreliable entity list”, restrict or investigate US companies such as Qualcomm, Cisco and Apple, and suspend the purchase of Boeing airplanes,” Hu tweeted.
The Chinese Ministry of Commerce (MOFCOM) indicated it would prepare an “unreliable entity” list during the U.S.-China trade war.
According to CNBC, Hu’s Twitter account was followed closely by traders looking for insights from China during the ongoing trade war. Stock prices fell Friday, amid a slew of negative economic reports and indications of the U.S.-China trade war heating back up.
While the trade war appeared to have been partly resolved after Trump and China signed a phase 1 trade agreement in January, there has been growing skepticism as to the future of U.S.-Chinese trade relations in recent months, in part due to the coronavirus pandemic.
Huawei has also been the subject of much scrutiny by U.S. officials, following concerns that it has helped authoritarian governments develop communications networks, and has maintained technological “back doors” to access data from unsuspecting users.
U.S. officials have made past moves to bar Huawei from having any involvement in developing 5G telecommunications networks for the U.S. and European allies.
The move to block the sale of computer chips to Huawei was part of a broader Trump administration effort to extend restrictions against the Chinese company. Huawei is now on the U.S. Commerce Department’s own.
“Entity List” which requires U.S. companies to obtain special licensing before selling parts to the Chinese company.
Comments