WASHINGTON – The United States said on Monday it would block a Chinese state-owned technology company from buying US components because it posed a threat to national security, the latest shock in a growing row between the two largest economies in the world.
The company, Fujian Jinhua Integrated Circuit, a semiconductor manufacturer, "poses a significant risk" of engaging in activities that could violate national security, the Commerce Department said.
The move could paralyze Jinhua, which is based on US components for its semiconductors, and followed a similar action taken by the Commerce Department this year to block sales of components to ZTE, a Chinese telecommunications company. The ZTE ban was rescinded after President Trump, in response to a request by President Xi Jinping of China in May, asked the department to ease the penalty. ZTE agreed to pay a large fine, reorganize its leadership and undergo compliance monitoring by the United States.
But relations between the United States and China have worsened since then, and the Trump administration is taking an increasingly harsh line in transactions involving Chinese entities. It is anxious to prevent China's rise as an economic and technological power and has begun to aggressively examine agreements abroad to prevent Beijing from gaining access to valuable US intellectual property.
This month, the Department of the Treasury. He described how he would use the new powers that allow the United States to review a wider range of foreign transactions, including those in sensitive industries such as technology and telecommunications.
"When a foreign company engages in activities contrary to our national security interests, we will take strong measures to protect our national security," said Wilbur Ross, the commerce secretary. "Placing Jinhua on the list of entities will limit its ability to threaten the supply chain of essential components in our military systems."
Jinhua has been on the radar of the Trump administration for several months. Micron Technology, a computer memory company in Idaho, accused Jinhua last year of stealing intellectual property. In July, Micron failed to sell some of its products in China after Jinhua and its Taiwanese partner, United Microelectronics, accused Micron of violating its patents.
Jinhua is opening a $ 5.7 billion factory in the Chinese province of Fujian and has become increasingly ambitious in its desire to become a global player in the memory chip business.
The United States and China have been involved in a trade war, with Mr. Trump imposing tariffs on Chinese products worth $ 250 billion and threatening to affect all of China's imports with taxes. China has responded with its own tariffs, and the two countries have exchanged Words increasingly heated in recent weeks.
The United States wants China to open its market to US companies and put an end to its long-standing practice of pressuring US companies to provide valuable technology as a condition of doing business there. Mr. Trump and Mr. Xi are expected to meet in Argentina next month at the summit meeting of the Group of 20, where they plan to discuss trade, North Korea and other issues.
While Trump's tariffs have proved unpopular with Republican and Democratic lawmakers, his efforts to stop intellectual property theft have been praised even by his skeptics about trade.
"China's state-run and state-owned companies lie, cheat and steal at the behest of the government," Sen. Marco Rubio, a Republican from Florida, said on Twitter on Monday. "Fujian Jinhua must be held responsible for being part of that illegality. This was the right move today to protect our technological knowledge. "