China Threatens To Take Action If US Tightens Chip Export Ban

China issued a stern warning that it would take "the necessary actions" to protect local companies if the United States increases chip export restrictions. This was done, following reports that President Joe Biden's administration plans to impose a new ban this week.

Last week, the US Chamber of Commerce informed its members by email that the White House was considering embedding up to 200 Chinese chip companies on the trade blacklist. This policy would prohibit most US suppliers from sending their products to these companies.

A spokesman for China's Ministry of Trade, He Yadong, at a press conference on Thursday, November 28, stated that China was "strongly against" US measures that were deemed to have abused the concept of national security to tighten controls against Chinese companies.

These measures seriously disrupt the economic order and international trade, undermine global industrial security, and hinder cooperation efforts between China and the US, including in the global semiconductor industry, said He Yadong.

He also added that if the US insists on expanding its control measures, China will take firm action to protect the legitimate rights and interests of Chinese companies.

According to a Bloomberg report, the White House is considering additional restrictions related to sales of semiconductor manufacturing equipment and AI memory chips to China. However, some companies, such as ChangXin Memory Technologies, which are developing AI memory chip technology, are reportedly not going to be included in the new sanctions.

This plan also targets two chip factories owned by Semiconductor Manufacturing International Corp. (SMIC), Huawei partners, and more than 100 Chinese companies that produce semiconductor manufacturing equipment, not the chip itself.

President Biden is scheduled to leave office in January. On the other hand, President-elect Donald Trump promised to impose an additional 10% tariff on all imports from China, beyond the current rates. Trump also accused China of not seriously stopping the flow of illegal drugs into the US via Mexico.

Responding to the tariff threat, China's Ministry of Commerce on Thursday confirmed that the additional tariff policy would not solve domestic problems facing the US.