The U.S. Department of Commerce Friday afternoon escalated the Trump administration’s commerce dispute with China, walling off exports to 2 dozen primarily Chinese entities it believes act as procurers for the nation’s navy.
Commerce Secretary Wilbur Ross mentioned in an announcement that the upcoming transfer will “demonstrate our commitment to preventing the use of U.S. commodities and technologies in activities that undermine our interests.”
The Commerce Department introduced it plans to behave in opposition to 24 enterprise entities primarily based in China, Hong Kong or the Cayman Islands—a haven for tax avoidance—that signify a “significant risk” of supporting Chinese navy provide chains.
The firms embrace numerous know-how and analysis corporations, similar to CloudMinds, primarily based in Beijing, which operates cloud-enabled robotic techniques, and Qihoo 360, additionally in Beijing, which develops antivirus software program.
A spokesperson for the Chinese embassy in Washington, D.C., didn’t return a request for remark from Newsweek.
The division will add the businesses to its Entity List, a piece of the federal physique of rules outlining which overseas entities are prohibited from being bought American items or applied sciences with out the issuance of a particular license to the exporter.
The rules specify key merchandise that the Department of Commerce controls below this licensing regime that would implicate nationwide safety, overseas coverage or nonproliferation considerations. They place a considerable deal with so-called “dual use” objects which can be bought for civilian use however may have navy functions as effectively.
This is the second transfer from the Department of Commerce previously week to clamp down on U.S. exports to China, additional rattling a commerce standoff between the 2 nations that had been subsumed by the coronavirus pandemic.
Last Friday, the division introduced a brand new rule in search of to limit the flexibility of Huawei—China’s crown jewel telecommunications firm—to entry crucial inputs. The motion was prompted by what Ross described as an evasion of earlier restrictions when the corporate was added to the Entity List in May 2019.
According to Ross, Huawei had tried to sidestep the designation by in-sourcing extra of its manufacturing course of. The rule, which is able to take impact in September, strikes to restrict this by stopping overseas vegetation enabled by U.S. know-how from producing chips designed by Huawei and not using a license.
However, the presumption is that the license could be denied.
In response to that announcement, the state-run Global Times cited a supply near the Chinese authorities as threatening “countermeasures” in opposition to outstanding U.S. firms similar to Apple and Boeing.
“China will launch rounds of endless investigations on those firms, just like swords hanging over their head,” one “insider” informed the outlet. “It will dampen investors’ confidence and squeeze their income in the Chinese market.”