global trade

US will ‘absolutely’ hit Chinese firms if they violate export controls on Russia

Reuters
US will ‘absolutely’ hit Chinese firms if they violate export controls on Russia

TRADE. US Commerce Secretary Gina Raimondo testifies before a Senate panel on Capitol Hill in Washington, DC, February 1, 2022.

Andrew Harnik/Pool/Reuters

The United States is monitoring for possible violations of its sweeping export controls on Russia 'hour by hour, minute by minute,' says Commerce Secretary Gina Raimondo

WASHINGTON, USA – The United States will “absolutely” enforce export controls if Chinese companies send semiconductors to Russia that were made with US technology, a move that could “essentially shut them down,” Commerce Secretary Gina Raimondo said on Wednesday, March 23.

Raimondo doubled down on US threats to punish any company in any country that violated tough export controls that the United States has imposed on Russia over its invasion of Ukraine.

Raimondo said all Chinese semiconductor companies relied on US software to make their chips, which made them subject to controls. “If we find that they are selling chips to Russia, then we can essentially shut them down by denying them use of that software, and we’re absolutely prepared to do that,” she told Reuters in an interview.

President Joe Biden plans to announce a fresh package of sanctions on Russian political figures and oligarchs during emergency talks this week in Brussels with European and NATO leaders, national security adviser Jake Sullivan said on Wednesday.

The United States and its allies are seeking to ratchet up pressure on Russian President Vladimir Putin to halt the war, which Russia calls a “special military operation.”

They are particularly concerned about China’s relationship with Russia, its failure to condemn the invasion, and US reports that Beijing is willing to provide military assistance to Moscow – all issues on the agenda during Biden’s meetings.

Beijing has described the sanctions imposed on Russia as increasingly outrageous, although it has expressed concern about the war.

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Raimondo said the United States was monitoring for possible violations of its sweeping export controls on Russia “hour by hour, minute by minute,” and would crack down on any violations by any country as they occurred.

Asked whether Chinese firms were violating the controls so far, Raimondo said no, but noted that Commerce does not disclose investigations or enforcement actions before they are finalized.

The former venture capitalist and Rhode Island governor said Washington expected China to comply because the consequences would be severe and could hit any company, including Chinese semiconductor maker Semiconductor Manufacturing International Corporation (SMIC).

Raimondo said she mentioned SMIC in an interview with the New York Times earlier this month as an example of the companies that could be affected, and should have said “XYZ company” instead. But she denied that she was softening the threat.

“I’m not walking that back. I’m very consistent and clear,” Raimondo said.

She said the unprecedented breadth of the concerted Western action against Russia could not be lost on Beijing, and noted recent US agreements on steel and aluminum with the European Union, Britain, and Japan that are squarely aimed at cracking down on Chinese overcapacity.

“What you’re seeing now is really unprecedented levels of cooperation between the US and our like-minded allies,” Raimondo said. “I’m sure that China takes notice that America is strong and that our relationship with our partners is stronger than it’s been in a long time.” – Rappler.com

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