What you need to know
- China is mulling over retaliatory measures against the U.S., following its move to cut off Huawei's access to crucial semiconductor suppliers.
- Reports suggest it's considering launching investigations against U.S. companies.
- Apple, Boeing, Cisco, and Qualcomm have all been named as potential targets.
The trade war between the U.S. and China may be slated to become far more damaging soon. Following the announcement of new rules by the Trump administration that effectively prevent non-U.S. chipmakers — like Taiwan-based TSMC — from supplying Huawei, China is considering retaliatory measures against U.S. companies in response.
The Global Times reports that the Chinese government is considering a range of legal measures targeting U.S. companies, including launching investigations into them or otherwise restricting their ability to operate in the country.
The report specifically lists the possibility of using laws like the Cybersecurity Review Measures and Anti-monopoly Law to target Apple, Cisco, and Qualcomm. At the same time, the country may also choose to stop purchasing Boeing planes for the foreseeable future to put the hurt on U.S. companies.
"China will launch rounds of endless investigations on those firms, just like swords hanging over their head. It will dampen investors' confidence and squeeze their income in the Chinese market," said one anonymous insider cited in the report.
And in a move similar to the one that started the whole Huawei saga, the Chinese government is also considering the use of an 'unreliable entity list' to target U.S. companies.
The unreliable entity list will include foreign organizations, individuals and companies that block or shut supply chains, or take discriminatory measures for non-commercial reasons, whose actions endanger the business of Chinese companies as well as global consumers and companies, according to MOFCOM, noting that once a company is listed, it will face necessary legal and administrative measures and the Chinese public will also be warned against it to reduce risks.
Alongside those mentioned above, the Chinese government may also choose to target smaller firms, which would be far less capable of weathering such measures as a "first-level warning," said Gao Lingyun, one of the experts cited in the report.
