Gina Raimondo, the U.S. Commerce Secretary, issued a stern warning Tuesday to Chinese companies that might defy the country's restrictions on exports to Russia, saying the United States would cut them off from the American equipment and software they need to produce their products.
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The Biden administration could “essentially shut down” Semiconductor Manufacturing International Corporation or any Chinese companies that defy U.S. sanctions by continuing to supply chips and other advanced technology to Russia, Ms. Raimondo said in an interview with The New York Times.
The United States, the European Union and other governments have issued sweeping sanctions and export controls in response to the Russian invasion of Ukraine. The export controls prohibit the sale of certain high-tech products, including advanced semiconductors, to Russia and Belarus.
US export controls apply not only to American companies, but also to companies anywhere in the world that use American software or technology to manufacture their products, which includes many Chinese companies.
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China and Russia have strengthened their trade ties in recent years, and the Chinese government has expressed some solidarity with the Russian government despite the invasion. However, China does not have the capacity to manufacture the world's most advanced semiconductors, Raimond said, and Chinese companies that continue to supply Russia will face severe sanctions.
Russia “will certainly court other countries to stop our sanctions and export controls,” Ms. Raimondo said. But if the United States discovered that a company like Semiconductor Manufacturing International Corporation in Shanghai was selling its chips to Russia, “we could essentially shut down SMIC because we’re preventing them from using our equipment and software,” she said.
"They have a vested interest in not supplying these things to Russia. So they're not doing it out of the goodness of their hearts. It would be devastating to China's ability to produce these chips," Ms. Raimondo added.
The new export controls, issued in coordination with the European Union, Australia, Japan, South Korea and other allies, are designed to stem the flow of advanced technologies to Russia to undercut the Russian military and certain strategic sectors that help President Vladimir Putin maintain control of Russia.
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The United States took similar measures against Chinese telecommunications company Huawei in 2020, cutting it off from global supplies of chips and other electronics made with U.S. technology. The measure ended up crippling Huawei's successful mobile and broadband businesses.
