Home Business U.S. adds more Chinese firms to Commerce Dept. blacklist

U.S. adds more Chinese firms to Commerce Dept. blacklist

The U.S. is reportedly planning to blacklist dozens of Chinese companies in what’s seen as one of President Donald Trump’s final moves to cement his legacy as being tough on China. Sources told Reuters that the Commerce Department is planning to add about 80 more companies to its trade blacklist, and almost all of them are Chinese.

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More Chinese firms added to U.S. blacklist

Among the Chinese firms that are being added to the blacklist is the nation's top chip maker, Semiconductor Manufacturing International Corp, better known as SMIC. China's foreign ministry told reporters that if the report is true, the move is further evidence of U.S. oppression of Chinese firms. The agency also said Beijing would keep taking "necessary measures" to protect the rights of Chinese companies.

The Commerce Department's designations are expected to name some firms that Washington claims are tied to the Chinese military. Some of the companies are said to be helping the Chinese military build and artificial islands on the South China Sea and militarize them. Others are said to be facing allegations of human rights violations, Reuters' sources said.

The Trump administration has frequently used the so-called "entity list" to strike against major industries in China. More than 275 companies based in China and their affiliates are now included on that list. Among the big names on the entity list are Huawei and 150 of its affiliates. ZTE Corp is also included for violations of sanctions, and Hikvision, which makes surveillance cameras, is on the list for suppressing China's Uighur minority.

What the designation means for SMIC

This isn't the first time SMIC has attracted the attention of Washington. The Commerce Department ordered in September that suppliers of some types of equipment to SMIC apply for export licenses. Officials decided there was an "unacceptable risk" that the equipment could end up being used for military purposes.

Then in November, the Defense Department added SMIC to its own blacklist of Chinese companies for alleged military ties. That move bans investors in the U.S. from buying shares of the company starting in late 2021. The chip maker has said many times that it doesn't have any relationship with the Chinese military.

After being added to the Commerce Department's list, SMIC will now have to obtain a special license before suppliers in the U.S. can send important goods.

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