Trade Secretary Gina Raymondo on Tuesday issued a stern warning to Chinese companies that could violate US restrictions on exports to Russia, saying the US would disconnect them from US equipment and software needed to manufacture their products.
In an interview with The New York Times, Raymondo said the Biden administration could “fundamentally shut down” a Chinese company that violates U.S. sanctions by continuing to supply Russia with semiconductor manufacturing corporations or chips and other advanced technologies.
The United States, the European Union and other governments have imposed severe sanctions and export restrictions in response to the Russian invasion of Ukraine. Export restrictions prohibit the sale of certain high-tech products to Russia and Belarus, including advanced semiconductors.
U.S. export restrictions apply not only to US companies, but also to companies around the world that use American software or technology to manufacture their products, including many Chinese companies.
China and Russia have strengthened their trade ties in recent years, and the Chinese government has shown some solidarity with the Russian government despite the invasion. But China does not have the capability to build the world’s most sophisticated semiconductors, Raymondo said, and Chinese companies that continue to supply to Russia face severe penalties.
Russia will “certainly attract other countries to avoid our sanctions and export restrictions,” Raymondo said. If the United States finds a company such as the Semiconductor Manufacturing International Corporation in Shanghai selling its chips to Russia, it may say, “We can close the minimum wage because we prevent them from using our equipment and software.”“, She says.
“They have their own choice not to supply these products to Russia, so they are not doing it for the good of their hearts. It will be disastrous for China’s ability to produce these chips.“, Ms. Raimondo added.
The new export controls, issued in conjunction with the European Union, Australia, Japan, South Korea and other allies, are designed to prevent the flow of advanced technologies to Russia that could undermine the Russian military and some of the strategic areas that assist the president. Vladimir V. Putin controls Russia.
The United States took similar action against Chinese telecommunications company Huawei in 2020, cutting off the global distribution of chips and other electronics made with US technology. The move crippled Huawei’s thriving mobile and broadband business.