Wilbur Ross, Secretary of Commerce said that when a foreign company engages in activity contrary to its national security interests, the USA will take strong action to protect its national security.
The Trump administration has launched a new salvo in its escalating trade war with China by adding Fujian Jinhua Integrated Circuit, a state-backed company, to a list of businesses that may not buy components from U.S. firms.
The restriction is similar to the Commerce Department's move that almost put Chinese telecommunication equipment company ZTE Corp out of business earlier this year, . after it was cut off from US suppliers. The Trump administration has slapped billions of dollars in tariffs on Chinese imports, claiming the country is stealing United States technology.
On Monday, the US Commerce Department said Fujian Jinhua Integrated Circuit Company would not be able to buy components from American companies without a special license. So far, Washington has imposed tariffs on $200 billion of Chinese goods and Beijing retaliated with tariffs on $60 billion of U.S. goods and stopped buying American oil.
The Chinese company will not be able to buy components from U.S. companies without a special license, according to the department.
The first was ZTE after the company was caught exporting products to Iran and North Korea.More news: Daniel Ricciardo's disgusting , no good, very bad season continues
The move comes as the United States and China are locked in a standoff over trade, market access and the transfer of technology secrets, CNN said. Jinhua sued the US company the following month in a Chinese court and obtained an order blocking sales of some Micron products. In turn, the companies countersued Micron in China, where courts sided with them and banned some of Micron's chips in China.
Now, the Trump administration is taking action "in light of the likely USA -origin technology" that "threatens the long term economic viability of US suppliers of these essential components of US military systems".
It was not immediately clear what effect the Commerce Department action will have on Fujian Jinhua's operations.
He said the export restrictions would limit Jinhua's "ability to threaten the supply chain for essential components in our military systems".
Observers say the latest restriction against Fujian Jinhua is likely to spark new tensions between the two economic powerhouses, . since the company is at the heart of the "Made in China 2025" program to develop new high-tech industries.