WASHINGTON (Reuters) – The United States will add dozens of Chinese companies, including the country’s largest SMIC chip maker, to Friday’s commercial blacklist, two people familiar with the matter told Reuters on Thursday.
The measure, which had not been previously reported, is seen as the latest in President Donald Trump’s effort to consolidate his tough legacy against China. It comes just weeks before Democratic President-elect Joe Biden takes office on January 20th.
In all, the United States is expected to add about 80 additional companies and subsidiaries to the so-called list of entities, almost all of them Chinese.
The Department of Commerce’s appointments are expected to name some Chinese companies that Washington says have links to the Chinese military, including some that help it build and militarize artificial islands in the South China Sea, as well as some involved in alleged human rights violations, sources said.
The Trump administration has often used the list of entities (which now includes more than 275 companies and subsidiaries based in China) to reach out to major Chinese industries.
These include telecommunications equipment giants Huawei Technologies Co. and 150 subsidiaries, and ZTE Corp. for sanctions violations, as well as surveillance camera maker Hikvision for suppressing the Chinese Uighur minority.
SMIC, the Semiconductor Manufacturing International Corp., has already been in Washington’s sights.
In September, the Commerce Department ordered suppliers of certain equipment from the company to apply for export licenses after concluding that there was an “unacceptable risk” that the equipment supplied to it could be used for purposes. military.
SMIC, the Commerce Department and the Chinese embassy in Washington did not immediately respond to requests for comment Thursday.
Last month, the Department of Defense added the company to a blacklist of alleged Chinese military companies, effectively banning U.S. investors from buying its shares as of the end of next year.
SMIC has repeatedly said it has nothing to do with the Chinese military.
The designation of the list of entities would oblige SMIC to apply for a special license from the Department of Commerce before a US supplier could send it key products, part of an offer from the administration to curb its access to the sophisticated US chip manufacturing technology.
Commerce is also expected to add numerous SMIC-affiliated companies to the list of entities, according to sources.
SMIC is the largest Chinese chip manufacturer, but follows Taiwan Semiconductor Manufacturing Co., the market leader in the industry. Attempts have been made to build foundries for the manufacture of computer chips that can compete with TSMC.
Ties between Washington and Beijing have grown increasingly antagonistically over the past year, as the world’s two largest economies faced Beijing’s manipulation of the coronavirus outbreak, the imposition of a national security law on Hong Kong. Kong and rising tensions in the South China Sea.
Report by David Shepardson and Alexandra Alper; Additional reports by Humeyra Pamuk, Mike Stone and Karen Freifeld; Written by Humeyra Pamuk; Edited by William Mallard