Tech Giants Face China Backlash

Tech Giants Face China Backlash

Issue 19

05.18.20 - Chinese state media has threatened retaliation against U.S. tech companies after the Trump Administration moved Friday to further restrict Huawei’s access to microchips.

China’s Global Times, which is owned by the People’s Daily, the Communist Party’s official newspaper, said China could put U.S. companies on an “unreliable entity list,” which would subject them to regulatory investigations, audits, and other restrictions, according to Reuters. A move that ultimately wouldn’t matter if the companies stopped manufacturing in China.

The threat came amid the U.S. Commerce Department announcing that the U.S. could require licenses for companies selling semiconductors that have U.S. technology made abroad. That closes a loophole in the previous U.S. ban that had allowed U.S. companies to keep selling chips to Huawei that were fabricated overseas.

Huawei, the world’s second-largest smartphone maker, relies heavily on U.S. technology for its products. Losing access to could cripple the company – and hurt the bottom lines of the companies that supply it. This is following a policy theme in not only seeking to set precedents to reduce our reliance on Chinese manufacturing but also to further limit China's access to sensitive technologies.

Source: Reuters