Representatives of China’s Commerce Ministry said on Wednesday that enforcing US bans on certain tech products could be subject to the Anti-Foreign Sanctions Law, according to Bloomberg. The ministry accused the US of “abusing export controls to suppress and contain China” and engaging in “typical acts of unilateral bullying and protectionism.”
China and the US recently held trade talks in Geneva, during which the countries agreed to a 90-day pause on some reciprocal tariffs. The statement is the latest in a challenging trade landscape, while the US restricts semiconductors from flowing in and out of China.
China may take action against companies that comply with US restrictions on Huawei
The Chinese Commerce Ministry did not specify what action might be taken if an individual or corporate entity is found to have assisted with US export controls, per Bloomberg. However, it is worth noting that China controls access to supplies of critical minerals needed for high-tech products.
SEE: NVIDIA CEO Jensen Huang said the AI diffusion rule would have been ineffective and would have hurt his business.
The US has encouraged China to cooperate more with its efforts to curb the flow of the drug fentanyl from China into the US. Since the Biden administration, the US has kept an eye on the route of the drug from Asia into the US and Mexico.
Tech restrictions have been a bargaining chip in other discussions and a significant financial lever for the US and China.
US-China trade talks balance cooperation and restrictions
On May 11, US and Chinese officials met in Geneva for a conversation that temporarily softened the tense trade landscape between the two countries. Some reciprocal tariffs were suspended for 90 days.
On May 13, the US Department of Commerce rescinded the AI Diffusion rule set to come into effect on May 15. On May 19, the department said it would “issue a replacement rule,” and meanwhile provided guidance saying:
- US companies and individuals are prohibited from using Huawei Ascend AI chips.
- US companies and individuals should avoid exports, re-exports, or transports that could lead to the use of advanced American AI chips for “training and inference of Chinese AI models.”
- Certain red flags, including unclear or missing information about a data center’s delivery address, may indicate “illegal diversion schemes” to route chips to sanctioned countries.
In Geneva, the two countries agreed to form “a mechanism to continue discussions about economic and trade relations.”
