By restricting global processor supplies to telecom giant Huawei while supporting a Taiwanese semiconductor maker build a next-generation facility in Arizona, the United States unloaded a heavy blow to China's rising tech force.
China responded to the American escalation by threatening a host of countermeasures through its state-controlled news agency, including putting US companies such as Apple, Qualcomm and Cisco on an "unreliable list of entities."
A new law, announced by the Department of Commerce and first published by Reuters, extends U.S. authority to require licenses to sell semiconductors manufactured abroad with U.S. technology to Huawei, extending its scope to stop exports to world's No. 2 smartphone company.
After Washington announced new export controls to limit the tech giant 's access to semiconductor technology, Beijing has urged Washington to halt what it describes as "unreasonable suppression of Huawei and Chinese companies."
The Chinese government will firmly uphold the legitimate and lawful rights and interests of Chinese companies, the Foreign Ministry disclosed Saturday in a statement. The ministry has said the acts of the Trump administration "destroy global chains" of production, supply and value.
The U.S. Department of Commerce announced on Friday that it would change an export regulation to strategically restrict the acquisition of semiconductors by Huawei that are the direct result of some U.S. software and technology.
Huawei was placed on an economic blacklist in May 2019 but continued to use US software and technology under an obscure loophole to produce chips.
News of the move against the company hit European stocks as traders sold against the day's gains, while shares of chip equipment manufacturers like Lam Research and KLA Corp closed down 6.3 percent and 4.7 percent, respectively on Wall Street.
China 's reaction was rapid, carrying out interventions that include conducting investigations and enforcing limitations on U.S. firms such as Apple Inc., Cisco Systems Inc. and Qualcomm Inc., as well as halting Boeing Co aircraft purchases, the report disclosed.
U.S. officials have repeatedly accused the Chinese technology giant of stealing American trade secrets and supporting Chinese espionage activities, raising tensions with the rival superpower as both sides were engaged in a long-drawn economic discord.
As a result, Huawei has increasingly focused on domestically produced technology, but the new rules would also prohibit foreign firms using US technology from shipping semiconductors to Huawei without US permission.
The Commerce Department's policy, to take effect Friday but with a 120-day grace period, also impacts Taiwan Semiconductor Manufacturing Co, the largest contract microchip manufacturer and major supplier to Huawei, which disclosed plans to launch a US-based plant on Thursday.
