China-US tensions increase as China bans purchases of Micron Technology memory chips
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The United States’ Commerce Secretary Gina Raimondo commented this Saturday on China’s move to ban purchases of Micron Technology memory chips. According to Raimondo, the US won’t tolerate the move and is already collaborating closely with its allies to address this “economic coercion.”
The US is firmly opposing China’s move to ban Micron chip purchases
Following a meeting of trade ministers in the US-led Indo-Pacific Economic Framework talks, Raimondo stated that the US firmly opposes China’s actions against Micron. The Commerce Secretary said that China is targeting a single US company without any basis. In fact, the US views it as plain and simple economic coercion, which will not be tolerated, and it also won’t be successful.
China’s move to ban Micron purchases came on May 21st, when its cyberspace regulator said that the largest chip maker in the US had failed its network security review. Due to these concerns, China decided to block operators of key infrastructure from buying chips made by an unsafe company. The move prompted the firm to predict a revenue reduction.
Coincidentally, the move also came only one day after G7 leaders agreed to new initiatives that would allow it to push back against economic coercion by China. Raimondo said, “As we said at the G7 and as we have said consistently, we are closely engaging with partners addressing this specific challenge and all challenges related to China’s non-market practices.”
Problems in the chip-making industry
The United States’ government has found the matter so problematic that Raimondo continued to raise the issue during a recent meeting with China’s Commerce Minister, Wang Wentao. The talks with the Chinese Commerce Minister resulted in criticisms and accusations on both sides.
The US, as mentioned, had an issue with China’s ban on Micron’s chip purchases, while Wang criticized the US economic and trade policies toward China. He included the US-led Indo-Pacific Economic Framework, pointing out that it was designed to exclude China and provide the US as an alternative to China’s influence.
China has also recently been in a similar chip-related conflict with Japan since the country halted semiconductor export controls. Wang called the move a “wrongdoing” that “seriously violated” international economic and trade rules. Japan and the Netherlands matched the US export controls earlier this year in January, effectively limiting the sale of certain chipmaking tools to China.
As for Raimondo, she further stated that the IPEF agreement on supply chains and other pillars of the talks would remain consistent with US investments. Specifically, she was referencing the $52 billion CHIPS Act, meant to foster local production of semiconductors and reduce the US dependency on foreign suppliers.
Having said that, Raimondo added that participation from companies that are in IPEF countries is still more than welcome. This includes nations like Japan, Singapore, and Korea, among others.
