SupChina illustration by Derek Zheng
U.S.-China relations continue to get worse, and the knives may be out for American companies.
Almost exactly a year ago, in May 2019, the Trump administration first announced its “entity list” designation for Chinese telecom giant Huawei. These restrictions on American companies exporting critical components to Huawei presented a potential existential threat to the company, and comprised the most significant salvo in a tech war that has accompanied the trade war. At the time, the Chinese commerce ministry responded by threatening to create an “unreliable entities list” for American companies — but this threat never materialized.
Last Friday, the U.S. Commerce Department proposed new rules that would tighten the “entity list” designation, and further restrict Huawei’s access to American technology. The rules specifically mention HiSilicon, an affiliate of Huawei’s that recently broke into the list of the world’s top 10 chipmakers.
China is again threatening an “unreliable entities list,” this time via the nationalistic tabloid the Global Times. Global Times editor Hú Xījìn 胡锡进 added on Twitter: “Based on what I know, if the U.S. further blocks key technology supply to Huawei, China will activate the ‘unreliable entity list,’ restrict or investigate U.S. companies such as Qualcomm, Cisco and Apple, and suspend the purchase of Boeing airplanes.” The same threats appear in an article that was highlighted prominently on the Global Times’ Chinese-language home page.
How real is the threat to Qualcomm, Cisco, Apple, and Boeing?
It is hard to tell if the threat is credible, especially since it is coming from an unnamed source in the Global Times and not directly from the Chinese commerce ministry. But given the renewed downward spiraling of U.S.-China relations in recent weeks, it would be unwise to rule anything out. Things can always — and almost certainly will — get worse.
Also last week in worsening U.S.-China ties:
- The Trump administration further escalated the U.S.-China blame game, with the FBI issuing a warning of Chinese attempts to steal U.S. COVID-19 research, and Trump referring to COVID-19 as the “Plague from China.” China responded to the research theft allegation by asserting that it leads vaccine R&D and has no need to steal.
- New visa restrictions for Chinese journalists working in the U.S. for non-American outlets were announced by the Department of Homeland Security on May 8, in the latest round of a tit-for-tat media spat between the U.S. and China and another loss for press freedom.