WASHINGTON (Reuters) – The United States will add dozens of Chinese companies, including the country’s largest chip maker SMIC, to a trade black list on Friday, two people familiar with the case told Reuters on Thursday.
The move, which has not been previously reported, is seen as the final step in President Donald Trump’s attempt to bolster his tenacious legacy in China. It will only be weeks before Democratic President-elect Joe Biden takes office on January 20.
In total, the United States is expected to add about 80 additional companies and affiliates to the so-called entity list, almost all of them Chinese.
The designation by the Ministry of Commerce is expected to name some Chinese companies that Washington says have links with the Chinese military, including some that are helping to build and militarize artificial islands in the South China Sea, and some that are involved. for alleged human rights violations. sources said.
The Trump administration has often used the entity list – which now includes more than 275 China-based companies and affiliates – to hit key Chinese industries.
These include telecom equipment giants Huawei Technologies Co and 150 affiliates, and ZTE Corp for violation of sanctions, as well as surveillance camera manufacturer Hikvision for oppression of the Uyghur minority in China.
SMIC, the Semiconductor Manufacturing International Corp, was already in Washington’s crosshairs.
In September, the Department of Commerce mandated that suppliers of certain equipment apply to the company for export licenses after concluding that there was an “unacceptable risk” that the equipment supplied to the company could be used for military purposes.
SMIC, the Commerce Department and the Chinese Embassy in Washington did not immediately respond to requests for comment on Thursday.
Last month, the Department of Defense added the company to a blacklist of alleged Chinese military companies, effectively banning US investors from buying their shares from the end of next year.
SMIC has repeatedly stated that it has no relationship with the Chinese military.
The entity list designation would force SMIC to apply for a special license from the Department of Commerce before a US supplier could send it important goods, part of a government bid to curb its access to advanced US chip technology.
The trade is also expected to add numerous SMIC affiliates to the entity list, the sources said.
SMIC is the largest Chinese chip manufacturer but is behind Taiwan Semiconductor Manufacturing Co, the industry leader. It has tried to build foundries to manufacture computer chips that can compete with TSMC.
The ties between Washington and Beijing have become increasingly antagonistic over the past year as the world’s two largest economies discussed Beijing’s handling of the coronavirus outbreak, the imposition of a national security law in Hong Kong and mounting tensions in the South. -Chinese Sea.
Reporting by David Shepardson and Alexandra Alper; Additional reporting by Humeyra Pamuk, Mike Stone and Karen Freifeld; Written by Humeyra Pamuk; Editing by William Mallard