As tensions rise over semiconductor trade and American security concerns, China warned of retaliation if the US enacts new chip controls, which could blacklist 200 Chinese companies.
On Thursday, China issued a warning that it will take action if the United States moves forward with new chip control measures. This comes after reports indicated that the Biden administration could introduce new export regulations by the end of the week.
According to Reuters, the US Chamber of Commerce informed its members that the proposed plan could include adding up to 200 Chinese semiconductor companies to a trade blacklist, which would prevent most US suppliers from selling to them.
China’s Ministry of Commerce spokesperson, He Yadong, strongly opposed what he described as the US expanding its definition of national security and misusing control measures targeting Chinese firms.
Yadong argued that these actions severely disrupt global economic and trade systems, undermine industry security worldwide, and damage cooperation between China and the US. While China has not yet specified what actions it might take in response, Yadong stated that the country would take steps to defend the rights of its companies.
These developments mark a shift after the Biden administration passed a bipartisan bill in 2022, allocating $53 billion to incentivise chipmakers to build manufacturing facilities in the US to increase the country’s competitiveness with China.
The US has already imposed stricter semiconductor controls due to concerns that China might use the technology to enhance its military capabilities. Semiconductors are critical components for various products, including electronics, vehicles, medical devices, and defence systems.
On the other hand, there are also concerns about the potential impact on the semiconductor industry if President-elect Donald Trump assumes office in January 2025.
In October, Trump criticised the chip deal, calling it a bad deal and claiming it allowed wealthy companies to take advantage of government funds to set up chip manufacturing in the U.S. He also stated his plans to impose up to 60% tariffs on goods from China and a minimum 10% tax on all other imports.
