House China Hawks Demand Commerce Department Protect U.S. Chip Sales

Last month, Beijing announced retaliatory measures to counter the U.S.’s trade restrictions on Chinese chips. In response, leaders on the House Foreign Affairs Committee and Select Committee on China are demanding the administration ensure China can’t enforce it’s ban and calling on the Bureau of Industry and Security (BIS) to place CXMT on the Entity List.

In a June 1 joint letter to Secretary Raimondo, Representatives McCaul and Gallagher wrote:

“In response to the United States’ legitimate national security action, the CCP lashed out with an arbitrary economic embargo against one American company. Now, the United States must ensure that this economic aggression fails.”

Regarding CMXT, they wrote:

“ChangXin Memory Technologies’ (CXMT) products are widely understood to serve military and surveillance end uses and the company co-invests with the PRC government and military-tied entities. As a result, the Department of Commerce, acting through the Bureau of Industry and Security, has a strong legal basis for placing CXMT on the Entity List…”

Additionally, they called on the Commerce Department to work with allied nations to ensure that U.S. companies are not adversely impacted.  

Per CTT’s No Weak Links report, China has directed tens of billions of dollars in investments toward YMTC, SMIC, and CXMT. The sizable investments allow the products to be priced lower than competitors by 40-60%, opening the door for major market distortion. Although Washington blacklisted YMTC in December, CXMT remains a looming threat. Reps. McCaul and Gallagher are right: the Commerce Department can act to protect both our national and economic security.

Check out the blog on our website!