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.”