US restricts 28 Chinese groups in trade war escalation

The Trump administration will restrict companies from exporting American-made goods to 28 more Chinese companies and organisations, in an announcement that is likely to escalate the US-China trade war just days before the next round of talks.

Wilbur Ross, the US commerce secretary, announced on Monday his department was adding new Chinese groups to the so-called entity list, which means suppliers will have to obtain a special licence to continue selling to them.

The commerce department said the organisations had been targeted for their involvement in human rights abuses against Uighurs and other predominantly Muslim minorities in Xinjiang province.

Mr Ross said: “The US government and Department of Commerce cannot and will not tolerate the brutal suppression of ethnic minorities within China. This action will ensure that our technologies, fostered in an environment of individual liberty and free enterprise, are not used to repress defenceless minority populations.”

$250bn

the worth of Chinese goods that will be subjected to a higher US tariff from October 15

The organisations are principally involved in surveillance and artificial intelligence, and include Hikvision and Dahua, which make surveillance equipment, as well as Megvii and IFlytek, which develop facial and voice recognition. The security bureau for the province of Xinjiang, where experts estimate that around 1.5m minorities have been interned in camps, is also being added to the list.

A spokesperson for Hikvision said the company “strongly” opposed the US decision, which would “hamper efforts by global companies to improve human rights around the world”.

“Punishing Hikvision, despite these engagements, will deter global companies from communicating with the US government, hurt Hikvision’s US business partners and negatively impact the US economy.”

None of the seven other companies also listed commented on the move.

The US took the same action earlier this year against Huawei, the Chinese telecoms equipment maker, which has been accused of breaking US sanctions against Iran and of stealing American technology.

Since then some in Washington have been pressing to add Hikvision, Dahua and others to the list for human rights reasons, given their involvement in the Chinese state security apparatus.

But experts said in acceding to such pressure, the Trump administration had made it more likely that there would be a reaction from Beijing.

Paul Triolo, a technology policy expert at Eurasia Group, said: “This is the first time the administration has listed companies because of things they have done within China — this crosses a red line.

“I think Beijing is going to have to retaliate against this move.”

Some analysts have speculated that the Chinese government could put American technology companies on its own version of the export black list.

Kevin Wolf, who oversaw similar cases as assistant secretary of commerce under Barack Obama, said: “The regulations do allow the US to take such action for human rights reasons, but it is not common, and it has never had as much publicity as this.”

The announcement also has the potential to jeopardise any chances of a trade deal between the US and China, coming just three days before the visit of Liu He, Beijing’s chief trade negotiator with the US, to Washington.

Officials have been discussing a limited trade truce between the two countries, with Beijing showing little appetite to make concessions on key areas such as intellectual property and industrial subsidies.

If no agreement is reached, tariffs on $250bn worth of Chinese goods entering the US will rise from 25 per cent to 30 per cent on October 15. Mr Trump and President Xi Jinping have an opportunity to meet in person at the Apec leaders’ summit in Chile next month but it is unclear if either will attend.

Thanks to the Courtesy of :

https://www.ft.com/content/2a40927e-e946-11e9-a240-3b065ef5fc55

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