EU Companies Complain that Chinese Sanction Favors U.S. Tech Firms

EU tech firms complain the U.S. sanctions against Huawei and SMIC shuts them out of the Chinese tech market while U.S. tech firms can get exceptions. It’s a non-obvious side effect of the sanctions that almost certainly wasn’t an accident given the outgoing presidential administration’s “America First” trade policies.

“So far, US companies have been given licenses to supply Huawei, while European suppliers cannot,” an unnamed EU tech executive told The Financial Times.

A second source told the publication that their European tech firm could no longer supply components to Chinese firms because of suspicions that they’d be used for military purposes. But U.S. firms were allowed to supply the same components to the same Chinese companies.

“Europe must be careful not to be crushed in the competition for technological leadership between the USA and China,” Reinhard Ploss, the CEO of Germany-based Infineon, told CNBC. “The geopolitical tension between the two superpowers (is) a big concern because we think we should not focus on countries, we should focus on the needs of our global society.”

ASML, a Netherlands-based firm, is likewise prevented from selling its newest-generation hardware to China-based chipmaker SMIC. China normally represents 25 percent of its revenues.

Despite the complaints, some non-U.S. firms have gotten exceptions from China sanctions, including Samsung, which is based in South Korea, and Sony, from Japan. But the U.S.-centric nature of the sanctions could still have far-reaching consequences: As is the case in China, European governments now want to be less dependent on U.S. technologies.

“This process was accelerated by the US sanctions,” a European diplomat told The Financial Times. “For European companies, China is such a big market that they need to find ways of serving it.”

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Conversation 14 comments

  • Greg Green

    25 December, 2020 - 6:27 pm

    <p>ASML has 5 locations in the US, I would think that would be enough to be 'American.' Maybe they need better lawyers. Or lobbyists, I don't know which is cheaper.</p>

    • wright_is

      Premium Member
      26 December, 2020 - 10:47 am

      <blockquote><em><a href="#602507">In reply to Greg Green:</a></em></blockquote><p>Why should they have to bribe US representatives in order to do business? </p>

      • SvenJ

        Premium Member
        26 December, 2020 - 2:17 pm

        <blockquote><a href="#602606"><em>In reply to wright_is:</em></a><em> </em>Because that's how it works. Do you nothing about free enterprise?</blockquote><p><br></p>

        • wright_is

          Premium Member
          27 December, 2020 - 7:11 am

          <blockquote><em><a href="#602683">In reply to SvenJ:</a></em></blockquote><p>Saying, "because corruption is normal" isn't a valid answer. The US political system is corrupt and needs clamping down on. But as long as representatives are rewarded for corruption, things won't change.</p><p>(I'm not saying other systems aren't just look at the UK and jobs for the boys in the current crisis, but two wrongs don't make a right.)</p>

        • Paul Thurrott

          Premium Member
          27 December, 2020 - 9:05 am

          There’s no call for personal attacks like this.

    • andyhi

      27 December, 2020 - 3:51 pm

      <blockquote><em><a href="#602507">In reply to Greg Green:</a></em></blockquote><p>Maybe they simply need to request and justify an exception, similar to Sony, Samsung, etc.</p>

  • atimms

    26 December, 2020 - 9:00 am

    <p>Nit pick, isn't it EU sanctions? Sure they are echoing the US but they are imposed by the EU on EU companies. As the story says it's just that they've not implemented exceptions as the US has.</p>

    • wright_is

      Premium Member
      26 December, 2020 - 10:45 am

      <blockquote><em><a href="#602590">In reply to atimms:</a></em></blockquote><p>No, the US has banned companies world wide from delivering to China. If they ignore the sanctions, they will be blacklisted in America and AFAIK assets can be seized. </p><p>This is typical US overreach. </p>

      • codymesh

        26 December, 2020 - 11:14 pm

        <blockquote><em><a href="#602605">In reply to wright_is:</a></em></blockquote><p>Yep. America can always accuse others of not "playing fair", but it can never be accused of.</p>

        • Paul Thurrott

          Premium Member
          27 December, 2020 - 8:56 am

          Yes, all Americans are exactly like that. /s

          Come on.

      • andyhi

        27 December, 2020 - 3:45 pm

        <blockquote><em><a href="#602605">In reply to wright_is:</a></em></blockquote><p><br></p><p>It’s a simple choice… you have to do business in a manner agreeable to us or simply don’t do business with us. It would be hypocritical to say the EU doesn’t try to influence US companies in the same manor. </p>

  • nbplopes

    28 December, 2020 - 11:38 am

    <p>So US companies can on mass move their production to Asia, heck not move, actually hire Asian production in particular native to China … for the sake of lower labor costs meaning higher margins. Is it to be expected than that Asia, in particular China does not than learn about what is being produced and build on top? I mean, I would they be able to produce something that they don’t know anything about its after so long?</p><p><br></p><p>Honestely, not even espionage would be necessary. A simple social learning effect would resonate this output after 3 decades of this practice.</p><p><br></p><p>Crazy.</p>

  • melinau

    Premium Member
    29 December, 2020 - 9:03 am

    <p>Hopefully USA's rather silly position vis-a-vis China will alter with the new administration, though I doubt the various banssanctions will be removed. What should happen is that these are made consistent &amp; fair and based on logic, not Trump's irrational &amp; absurd prejudices.</p>

  • wright_is

    Premium Member
    01 January, 2021 - 3:26 am

    <blockquote><em><a href="#603441">In reply to truerock2:</a></em></blockquote><p>Yes, but US companies can trade with China, despite the US trade embargoes, but European companies can't, because the US won't let them. <em>That</em> is the point.</p>


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