Trump Administration Blacklists Chinese Tech Companies, Including AI Giants, over Abuses in Xinjiang

Oct 21, 2019

by ASME.org

China signaled that it would retaliate over the Trump administration’s recent blacklisting of Chinese technology giants, though trade negotiations on October 10 and 11 may change that position. Earlier that week, the U.S. widened its trade blacklist to include eight Chinese tech companies over alleged human rights violations against Muslim minorities in the Xinjiang region. Included are Hangzhou Hikvision Digital Technology and Zhejiang Dahua Technology—video surveillance companies with cameras around the world, possibly accounting for a third of the global market.

Also included are SenseTime—the world’s most valuable artificial intelligence (AI) startup at $7.5 billion—and AI giant Megvii. Both are backed by Alibaba—the world’s largest retailer, e-commerce company, and one of the largest Internet and AI companies. Other AI companies blacklisted include iFlytek and Yitu Technologies. A spokesperson for the U.S. Department of Commerce said that the “action is unrelated to the trade negotiations,” which have been ongoing for 15 months. To date, the U.S. has enforced tariffs on $550 billion worth of Chinese goods, compared to China’s $185 billion of U.S. goods.

Bolstering the notion that technology and tech competition are among the largest drivers of the U.S.-China trade war, the Trump administration’s move preceded the thirteenth round of trade negotiations between the two countries; Chinese Vice-Premier Liu He led a delegation in Washington to meet with U.S. Trade Representative Robert Lighthizer, Treasury Secretary Steven Mnuchin, and other U.S. officials on October 10 and 11. Beijing has now indicated that it is on the “same page” as Washington, following these talks. Nonetheless, the U.S. is scheduled to impose 15-percent tariffs on over $150 billion in Chinese goods on December 15.

Previous moves by the Trump administration to blacklist Chinese technology companies—most notably Huawei Technologies in August 2019—have been ostensibly rooted in grounds of national security. That move alone was estimated to cost Huawei $30 billion in revenue this year and next.

The full list of blacklisted companies is included in the rule set by the Commerce Department’s Bureau of Industry and Security, effective October 9, 2019.

ASME is increasing its monitoring of—and engagement with—international trade and related public policy developments that impact ASME’s members and the engineering community at large.

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