The U.S. is preparing to place dozens of Chinese companies, including Semiconductor Manufacturing International Corp, on a trade blacklist, citing national security concerns, Commerce Secretary Wilbur Ross said Friday morning.
The Commerce Department will add about 80 companies, the majority of which are Chinese, to the so-called entity list for national defense reasons. The firms will join the likes of Huawei on a list that denies them access to U.S. technology. There are nearly 700 companies on the list, Ross said, 296 of which are Chinese and 150 of which are related to Huawei.
SMIC will also be explicitly prohibited from acquiring technology to build chips with 10-nanometer circuits and smaller, Ross said.
"What this is all about is these are companies that are tied to the People's Liberation Army," Ross told FOX Business' Maria Bartiromo. He added: "This has to do with is their access to very advanced semiconductor products."
SMIC is the largest Chinese chip manufacturer and is a supplier to tech companies including Qualcomm and Broadcomm. Ross said the blacklist was necessary to "ensure that China, through its national champion SMIC, is not able to leverage U.S. technologies to enable indigenous advanced technology levels to support its destabilizing military activities."
The company did not immediately respond to a FOX Business' request for comment, but Chinese Foreign Ministry spokesman Wang Wenbin condemned the move during a briefing in Beijing on Friday.
“We urge the U.S. to stop its wrongful activities cracking down on foreign companies," he said.
The move is the latest effort by the Trump administration to crack down on Chinese tech companies, including SMIC. The Commerce Department in September placed SMIC on a separate export restrictions list, saying it had conducted a review and determined that the firm “may pose an unacceptable risk of diversion to a military end use in the People’s Republic of China.”
The decision to add 60 Chinese companies to the entity-list could inflame tensions between the world's two largest economies just a few weeks before President-elect Joe Biden prepares to assume office.
It's unclear how Biden intends to handle China.
U.S. relations with China deteriorated under Trump, who made it a campaign priority to shrink the trade disparities between the U.S. and its allies. For nearly two years, the two nations engaged in a tit-for-tat trade war until Trump and Chinese President Xi Jinping signed a partial trade deal in January 2020.
Biden said he wants to conduct a full review of the existing agreement with China before making any decisions and consult with America's traditional Asian and European allies to "develop a coherent strategy."
“The best China strategy, I think, is one which gets every one of our – or at least what used to be our – allies on the same page. It’s going to be a major priority for me in the opening weeks of my presidency to try to get us back on the same page with our allies," he said.