(ZEROHEDGE) – There was speculation early in the session that tensions between the U.S. and China were set to ease following an FT report that the U.S. Treasury department was "attempting to water down an executive order from President Donald Trump that bars Americans from investing in Chinese companies with suspected ties to the People’s Liberation Army" (which however was "met with furious opposition from the Pentagon and state department, opening up a heated dispute over one of the last big anti-Beijing policies of the Trump era"). So to set the record straight, Reuters first reported and this morning the Commerce Department confirmed that it’s blacklisting Semiconductor Manufacturing International Corp. and more than 60 other Chinese companies “to protect U.S. national security."
The designation restricts companies from exporting U.S.-origin technology to the listed firms without a license, with a provision that effectively prohibits SMIC from acquiring technology to build chips with 10-nanometer circuits and smaller, the industry’s top class of chips.
"This action stems from China’s military-civil fusion doctrine and evidence of activities between SMIC and entities of concern in the Chinese military industrial complex,” the Commerce Department said in a statement.
Advertisement - story continues below