Trump Administration’s Crackdown on Chinese Firms over Alleged Military Ties

SMIC

In last week on Thursday, the Trump administration adds China’s Biggest Chip Maker, SMIC, and CNOOC to the trade blacklist for alleged military ties.

China’s biggest semiconductor maker, SMIC depends heavily on equipment and software from U.S. suppliers to design and manufacture its chips.

The Chinese chipmaker said in a stock exchange filing on Friday that it was aware of the action and was still assessing the potential fallout.

The U.S. Department of Defense designated a total of 4 more companies as owned or controlled by the Chinese military, which includes China International Engineering Consulting Corp. and China Construction Technology Co Ltd.

Late on Thursday, the Department of Defense announced a total of four additions to its blacklist also including China Construction Technology Co Ltd and China International Engineering Consulting Corp.

SMIC and CNOOC

On Sunday, it was first reported by Reuters, that it takes to 35 the total number of blacklisted companies. Initially, there are no penalties, but a recent executive order by Republican President Donald Trump will prevent the U.S. investors from buying these firms’ securities from late next year.

Published in Forbes

In a Wall Street Journal op-ed published on Thursday, outgoing Director of National Intelligence John Ratcliffe claimed that China poses “the greatest threat to America today, and the greatest threat to democracy and freedom worldwide since World War II.” He alleged that many of China’s major companies and initiatives are only a “layer of camouflage to the activities of the Chinese Communist Party.” He added, “China robs U.S. companies of their intellectual property, replicates the technology, and then replaces the U.S. firms in the global marketplace.”

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