China Warns of 'Necessary Actions' Amid US Chip Blacklist Expanding to 200 Semiconductor Firms

China issued a strong warning Thursday, promising "necessary actions" if the US follows through on chip export curbs targeting 200 firms. The proposed restrictions could reshape global semiconductor supply chains and intensify economic tensions.

China Threatens "Necessary Actions" Over Potential U.S. Chip Restrictions

According to sources, the Biden administration could announce new export restrictions this week. In response, China threatened on Thursday to take "necessary actions" to safeguard Chinese enterprises in the event that the United States intensified its chip control efforts, Reuters reports.

A trade blacklist that would prohibit the majority of U.S. suppliers from exporting to 200 or more Chinese semiconductor companies was being considered by the Biden administration, according to an email sent last week by the U.S. Chamber of Commerce to its members.

China Condemns U.S. Blacklist and Expanded Chip Controls

China "strongly opposes" what he called the U.S. expanding the idea of national security and the "abuse" of control measures targeting Chinese enterprises when asked about the story at a regular news conference on Thursday. He Yadong, spokesperson for the commerce ministry, made these comments.

Concerned that China may use cutting-edge technology to bolster its military might, the United States has begun imposing stricter regulations on semiconductors.

"These actions severely disrupt the international economic and trade order, destabilise global industrial security, and harm the cooperative efforts between China and the U.S., as well as the global semiconductor industry," stated the president.

U.S.-China Semiconductor Tensions Escalate Amid New Curbs

"If the U.S. insists on escalating control measures, China will take necessary actions to resolutely protect the legitimate rights of Chinese enterprises," according to him.

According to a Bloomberg article from Thursday, the Biden administration is mulling up new restrictions on Chinese purchases of semiconductor equipment and artificial intelligence memory chips.

It reported that the most recent proposal will sanction fewer Huawei suppliers than originally intended, citing sources familiar with the matter. Notably excluded from this plan is ChangXin Memory Technologies, a company working on artificial intelligence memory chip technology.

Proposed Measures Target Semiconductor Equipment Over Chips

The article states that the proposal aims at more than 100 Chinese enterprises producing equipment for semiconductor production as well as two chip facilities controlled by Huawei's partner, Semiconductor production International Corp.

There are fears that the pledge by President-elect Trump to impose further tariffs on China would set off a trade war, and Biden is expected to resign from office in January.

China Criticizes Tariffs Amid U.S. Domestic Challenges

In addition to the current tariffs, Trump has promised to slap a 10% levy on all Chinese imports this week, Yahoo Finance shares.

He claimed that China was doing little to halt the import of illegal narcotics into the United States from Mexico.

Tariffs, according to China's trade ministry, will not fix domestic problems in the United States.