The Chinese government announced on Friday that it would create an “Unreliable Entity List” of foreign companies and individuals that threaten the interests of Chinese companies.
The move appears to be direct retaliation for Huawei’s placement on the US Commerce Department “Entity List” that effectively bans the sale of Huawei products in the US, though the Chinese tech giant was not mentioned specifically. The severe restrictions on Huawei in recent months have caused American companies such as Google and Intel to cut ties with the Chinese tech giant.
“Foreign enterprises, organisations or individuals that do not comply with market rules, deviate from a contract’s spirit or impose blockades or stop supplies to Chinese enterprises for non-commercial purposes, and seriously damage the legitimate rights and interests of Chinese enterprises, will be included on a list of ‘unreliable entities’,” Chinese Ministry of Commerce spokesperson Gao Feng told the Global Times.
The announcement was celebrated on Chinese social media, where it was described by some as “beating someone at their own game”. The US Department of Justice brought a lawsuit in January charging Huawei with fraud and the theft of trade secrets that is currently makings its way through the courts as the US-China trade war continues unabated.
The US alleges that Huawei has deep ties to the Chinese government and that its presence in the US is a national security issue. Beijing seems to be ready to make the same argument for American companies operating in China.
“Some foreign entities have violated normal market rules and the spirit of their contracts for non-commercial purposes, blockading and cutting off supplies and taking other discriminatory actions against Chinese companies damaging their legitimate rights and interests, and endangering China’s national security and national interests,” Gao continued.
China’s retaliatory tariffs against US goods will go into effect tomorrow and will impact roughly $US60 billion ($87 billion) in American exports.
American stocks tumbled in pre-market trading, though it seemed to have little to do with Asia this time. President Donald Trump appears to be starting a trade war on multiple fronts and announced yesterday that he would be slapping Mexico with its own five per cent tariff on goods imported from America’s southern neighbour.
Trump’s tariffs on Mexico are ostensibly about pressuring the Mexican government to stop illegal immigration into the US, though the move is likely to simply increase tensions and raise prices for American consumers.