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9 Mar, 2022 16:52

US threatens China over Russia trade

Washington warns chip manufacturers against exporting semiconductors to Russia
US threatens China over Russia trade

If Chinese tech companies violate American sanctions and continue exporting semiconductors to Russia and Belarus, Washington may retaliate by cutting them off from critical supplies, US Commerce Secretary Gina Raimondo warned on Tuesday in an interview with the New York Times.

In particular, she threatened the Semiconductor Manufacturing International Corporation (SMIC), Beijing's partially state-owned major chip maker.

“They have their own self-interest to not supply this stuff to Russia. So they’re not doing it out of the goodness of their heart. It would be devastating to China’s ability to produce these chips,” Raimondo said

She warned any attempt from SMIC to override the US ban on trade with Russia will force Washington to restrict the company’s access to America’s most advanced software, which is essential for the manufacturer.

It is not the first time Raimondo has taken a harsh stance on China. During her confirmation hearings before Congress in January 2021, she also pledged to adopt a hard line in response to Beijing’s “unfair trade practices.” Earlier, the US Commerce Department under then President Donald Trump banned Chinese firm Huawei, as well as hundreds of other companies from importing American chips.

Earlier last week, Beijing made it clear that it was willing to preserve its trade relations with Moscow. “We will not join such unilateral sanctions, and we will continue to maintain normal trade, economic and financial ties with [Russia],” chairman of the Banking and Insurance Regulatory Committee Guo Shuqing declared. 

The new round of sanctions against Russia was triggered by military attack on Ukraine, in late February.  The measures target the country’s tech, financial, and energy sectors. 

Russia and Belarus are now banned from importing high-tech products. Some banks have been cut off from SWIFT, the international financial transactions service. The United States and EU nations have also banned Russian flights from passing through their air space. At the same time, in protest at Moscow’s military offensive, many international companies have withdrawn from the Russian market.