WASHINGTON (Reuters) – U.S. President Donald Trump’s administration took action on Monday to cut off a Chinese state-backed chipmaker from U.S. suppliers amid allegations the firm stole intellectual property from U.S. semiconductor company Micron Technology Inc (MU.O
The Commerce Department said it had put Fujian Jinhua Integrated Circuit Co Ltd on a list of entities that cannot buy components, software and technology goods from U.S. firms.
The administration is concerned the Chinese firm could flood the market with cheap chips that are also made by U.S. companies that supply the U.S. military. If the U.S. chipmakers go out of business, the military would lose a supplier for an item that must come from the United States.
Trade experts said the Trump administration’s move may be an unprecedented effort to use a legal tool known for punishing foreign companies that send U.S.-origin goods to sanctioned countries such as Iran to instead protect the economic viability of a U.S. firm.
The move escalated what until now had been a business dispute into the realm of an international trade conflict between the United States and China. The Commerce Department spokesman said the move was “based on the regulatory standard.”
The action against Fujian Jinhua is likely to ignite new tensions between Beijing and Washington since the company is at the heart of the “Made in China 2025” program to develop new high-technology industries.
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