Things just may have gotten a whole lot worse for Russia, but not just them alone. China too. Gina Raimondo, the Secretary of Commerce, declared a dire warning on Tuesday to those in charge of Chinese companies. She said that if those companies defy restrictions that the United States has made against exporting to Russia, America will cut them off from the equipment and software we supply to make their products.
The bottom line is that the United States could essentially shut down companies like the Semiconductor Manufacturing International Corporation that choose to do business with advanced technology in Russia. Raimondo gave this warning in an interview with the New York Times.
The United States, along with the European Union, have made stiff sanctions with controls over exports against Russia because they invaded Ukraine. The controls on exports stop the sale of some high-tech products that include semiconductors which are typically sold to both Russia and Belarus.
The export controls from America are not just for American companies, they apply to any and all companies around the globe that use software or technology from the United States. And that means companies in China are subject to these controls.
This warning from the Secretary of Commerce is going to test the ties between Russia and China that have been made in the last few years. The Chinese government has been expressing a solid connection with Russia despite their attack on Ukraine. Some believe that China is watching and waiting for a chance to reclaim Taiwan.
Raimondo clearly threatened China with harsh penalties if their companies continue to supply Russia. She said that Russia will likely look to other countries to bypass American sanctions and export controls. She focused on what would happen if America finds out that Chinese companies like the Semiconductor Manufacturing International Corporation in Shanghai sell chips to Russia.
Raimondo said that America could shut them down by preventing them from using our equipment and software.
“They have their own self-interest to not supply this stuff to Russia. So they’re not doing it out of the goodness of their heart. It would be devastating to China’s ability to produce these chips,” Raimondo said.SMIC did not immediately respond to a request for comment.
America is not alone in its demands over export controls. These were given in coordination not just with the European Union, but with other countries like Australia, Japan, and South Korea. These restrictions are intended to nearly halt the intake of advanced technologies to Russia. It should degrade the Russian military and make it difficult for President Putin to keep control of his nation.
This is not the first time we have made this move with China. In 2020, the United States did the same thing with a Chinese telecom company in Huawei. They were cut off from global supplies of chips and other technology made with products from the United States. It successfully stopped the companies mobile and broadband business.
Given this invasion of Ukraine, the Biden Administration is even threatening to add more companies within China to the trade blacklist under the export controls.
The Chinese foreign ministry spokesperson in Beijing, Zhao Lijian, said that China opposed any unilateral sanctions mandated by the United States. He threatened that America’s policy towards Ukraine and Russia should not do damage to China’s interests.
Lijian told the media in a news briefing, “China will take all necessary measures to resolutely defend Chinese companies’ and individuals’ rights.”
The world is watching to see if these stern restrictions will divide Russia and China or bring them closer together.