Chinese Firms That Aid Russia May Be Cut Off From US Equipment

Gina Raimondo, the secretary of commerce, issued a stern warning Tuesday to Chinese companies that might defy U.S. restrictions against exporting to Russia, saying the United States would cut them off from American equipment and software they need to make their products.

The Biden administration could “essentially shut” down Semiconductor Manufacturing International Corporation or any Chinese companies that defy U.S. sanctions by continuing to supply chips and other advanced technology to Russia, Ms. Raimondo said in an interview with The New York Times.

The United States, the European Union and other governments have issued sweeping sanctions and export controls in response to the Russian invasion of Ukraine. The export controls prohibit the sale of certain high-tech products, including advanced semiconductors, to Russia and Belarus.

The U.S. export controls apply not just to American companies, but to companies anywhere in the world that use American software or technology to manufacture their products, which include many Chinese companies.

China and Russia have strengthened their trade ties in recent years, and the Chinese government has expressed some solidarity with the Russian government despite the invasion. But China does not have the ability to make the world’s most advanced semiconductors, Ms. Raimondo said, and Chinese companies that continue to supply Russia would face harsh penalties.

Russia “is certainly going to be courting other countries to do an end run around our sanctions and export controls,” Ms. Raimondo said. But if the United States were to find that a company like the Semiconductor Manufacturing International Corporation, in Shanghai, was selling its chips to Russia, “we could essentially shut SMIC down because we prevent them from using our equipment and our software,” she said.

“They have their own self-interest to not supply this stuff to Russia. So they’re not doing it out of the goodness of their heart. It would be devastating to China’s ability to produce these chips,” Ms. Raimondo added.

The new export controls, which were issued in coordination with the European Union, Australia, Japan, South Korea and other allies, are designed to stem the flow of advanced technologies to Russia to degrade the Russian military and certain strategic sectors that help President Vladimir V. Putin maintain control of Russia.

The United States took similar action against the Chinese telecom firm Huawei in 2020, cutting it off from global supplies of chips and other electronics made with U.S. technology. The measure ended up crippling Huawei’s successful mobile and broadband businesses.