AsianFin -- The U.S. government is reportedly mulling more curbs on China’s technology industries with new licensing rules targeting certain subsidiaries.
Credit：Xinhua News Agency
U.S. Officials are drawing up a rule that would requires licensing for transactions with companies that U.S.-blacklised companies own at least 50% stake in, Bloomberg cited people familiar with the matter on Friday.
It was reported that the new regulation is developed to prevent companies under sanctions from bypassing the curbs via the creation of new subsidiaries — a trend that’s produced what some US policymakers describe as a whack-a-mole problem.
The reported rule that U.S. is planning applies to subsidiaries of companies under the Entity List, Military End-User list and Specially Designated Nationals List. It could be made public as early as June, though its content, timing and related sanctions are not finalized yet, per the sources. It was said that the U.S. is likely to introduce new sanctions on major Chinese companies after the rule is unveiled.
The report deemed the subsidiary rule as the Trump administration’s move to broaden restrictions on China’s tech sector.
American officials in February were reported to have been considering sanctions on Changxin Memory Technologies Inc. and imposing curbs on parts of Semiconductor Manufacturing International Corp.’s business that are not subject to the existing U.S. controls.
The reported new regulation could dampen the outlook the U.S.-China trade deal as the Trump administration appeared more and more dissatisfied with the trade talks with Chinese counterparts.
U.S. President Donald Trump in a social media post on Friday accused Beijing of “totally violating” the preliminary trade deal that U.S. and China reached two weeks ago in Geneva. U.S. Trade Representative Jamieson Greer later in a CNBC interview raised same concerns, citing China’s purported non-compliance with the preliminary trade deal.
Greer complained China had not accelerate exports of critical minerals required for cutting-edge electronics. The “United States did exactly what it was supposed to do, and the Chinese are slow rolling their compliance,” said Greer. And suh slow response, for Greer, is “completely unacceptable and has to be addressed”.
Following Trump and Greer, Stephen Miller, the White House deputy chief of staff for policy, on Friday stressed that the president prefers cooperation. Though he cautioned China’s behavior “opens up all manner of action for the United States.”
In response to Trump’s accusation, Pengyu Liu, a spokesperson from China’s Washington embassy the US to "immediately correct its erroneous actions, cease discriminatory restrictions against China and jointly uphold the consensus reached at the high-level talks in Geneva".
Liu said China had recently "repeatedly raised concerns" with the US over its "abuse of export control measures in the semiconductor sector".
Trump at Friday afternoon reiterated his accusation, but raised hope for addressing any disputes through direct communication with Chinese President Xi Jinping.
“They violated a big part of the agreement we made,” Trump said in the Oval Office. “But I’m sure that I’ll speak to President Xi, and hopefully we’ll work that out.”
