US’s Raimondo warns Chinese firms on evading Russia sanctions

Commerce Secretary Gina Raimondo vowed to vigorously enforce export controls on Russia and said the U.S. would be on guard against Chinese semiconductor companies that might try to get around the sanctions.

“It’s going to be hard. I’m not going to pretend it won’t be hard,” she said in an interview at the White House Wednesday. “We’ve never done anything like this. But we have a plan and we’re serious about it.”

Raimondo told the New York Times earlier this week that the U.S. has the ability to shut down Chinese companies like Semiconductor Manufacturing International Corporation if they don’t comply with U.S. sanctions, but on Wednesday said it was “probably” a mistake to call out a specific company to showcase a hypothetical enforcement action.

“There’s no evidence that SMIC or any particular Chinese company is planning to do an end run around,” she said in the interview. “But what I was trying to say is: We’re serious about this. We’re going to enforce this and we have ways to enforce this, even against countries like China who aren’t going along with our export controls.”

Asked if the U.S. might hold off on unrelated actions against China if it enforced the U.S. sanctions against President Vladimir Putin’s government, Raimondo said: “There’s no breathing room to be had in this global competition for semiconductors.”

Beijing has long opposed U.S. sanctions against SMIC and other Chinese tech companies, accusing American policy makers of seeking to thwart China’s rise. President Xi Jinping’s government has also vowed to continue normal trade ties with Russia, one of its main diplomatic partners.

Representative Michael McCaul of Texas, the top Republican on the House Foreign Affairs Committee, called on the administration to impose the same restrictions on technology exports to China.

“Putin and Xi are both strategic adversaries and their militaries should have the same export controls,” he said in a statement. “Any company violating these rules should come under significant sanctions. The key will be setting up a system to monitor possible violations.”

Raimondo disagreed with the comparison of the two scenarios.

“It is certainly true that we are in a very heated competition with China. They have not, though, waged a ground war against their neighbor,” she said. “So I think to equate the two in that respect is probably not equivalent.”

At the same time, she added, the administration constantly reevaluates its export control policy as it relates to China, “and as we get more intelligence that might suggest we have to clamp down further, we’ll do it.”