Sanctions imposed on China are hurting European companies
Sanctions imposed on China are hurting European companies

European tech companies have complained that US sanctions on Huawei and minimum wages have prevented them from entering the Chinese technology market, while US tech companies can make exceptions.

European technology executives and diplomats accused the United States of using sanctions to ban it from the Chinese market while granting waivers to US companies.

This is an incomprehensible side effect of the sanctions, and given the trade policies of the outgoing presidential administration that have put the United States in charge, this is certainly no coincidence.

Several European chip makers and chip making equipment face US sanctions because they rely on US intellectual property rights.

An EU technical director told the Financial Times: "So far, American companies have been licensed to supply Huawei, but European companies have not."

Another source told the newspaper that European technology companies could not supply spare parts to Chinese companies on suspicion of using them for military purposes, but that US companies were allowed to supply them. The same goes for Chinese companies.

"Europe should act cautiously and not be overshadowed by the competition for technological leadership between China and the United States," Reinhard Bloss, CEO of Germany-based Infineon, told CNBC.

He added that geopolitical tensions between the two superpowers are a source of great concern because we believe that the focus should not be on the country but on the needs of our global community.

Dutch company ASML is prohibited from selling its latest generation machines to Chinese chip maker SMIC, which typically accounts for 25% of its sales.

Despite the complaints, some non-US companies have been exempted from sanctions imposed on Chinese companies, including Samsung in South Korea and Sony in Japan.

However, the nature of sanctions targeting the United States could have far-reaching effects: Just as in China, European governments now want to reduce their dependence on American technology.

"The US sanctions have accelerated this process. China is a huge market for European companies and they need to find a way to serve them," a European diplomat told the Financial Times.

Previous Post Next Post