Published: Fri, November 02, 2018
Business | By Eloise Houston

United States imposes restrictions on Chinese tech firm

United States imposes restrictions on Chinese tech firm

In what appears to be another salvo in the U.S. China trade war, the Commerce Department added chip maker Fujian Jinhua Integrated Circuit its export restriction list for national security reasons.

The Commerce Department said it's blocking sales of American components to Fujian Jinhua Integrated Circuit Company Ltd, recalling a similar ban that brought telecoms gear giant ZTE Corp to a virtual standstill.

It said in a statement that Fujian Jinhua "poses a significant risk of becoming involved in activities that are contrary to the national interests of the United States". Commerce Secretary Wilbur Ross noted that the State would ban US firms from exporting software and technology goods to the Chinese chipmaker.

ZTE Corp., China's second-biggest maker of telecoms equipment, faced possible bankruptcy this year after Washington imposed a seven-year ban on sales of US technology to the company over its exports to Iran and North Korea. We'll probably see how the Chinese government responds to this escalation of economic tension from the the coming days, weeks and months.

The two countries are already in a major tariff war with US duties in place on 250-billion dollars worth of Chinese goods and Chinese duties on 110 billion dollars of USA goods.

Reuters noted in their coverage that the Trump administration cut off the Chinese state-backed chipmaker from us suppliers amid allegations the firm stole intellectual property from usa semiconductor company Micron Technology Inc.

According to media reports, the American chip-maker found itself targeted after it turned down an acquisition offer.

USA firms now require a permit to fare to Fujian Jinhua.

It was not immediately clear what effect the Commerce Department action will have on Fujian Jinhua's operations.

"At the point when a remote organization participates in action in opposition to our national security interests, we will make a solid move to ensure our national security", US Commerce Secretary Wilbur Ross said in an announcement. "Placing [Fujian] Jinhua on the Entity List will limit its ability to threaten the supply chain for essential components in our military systems".

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