(Bloomberg) -- Two key Republican lawmakers are pressing the Biden administration to counter Beijing’s ban of US chipmaker Micron Technology Inc. by sanctioning a Chinese semiconductor company and ensuring that Japanese and South Korean firms don’t take advantage of the blockade.
House Foreign Affairs Committee Chairman Michael McCaul and Mike Gallagher, chairman of the Select Committee on the Chinese Communist Party, told Commerce Secretary Gina Raimondo that China’s move should “invigorate,” rather than deter, export control actions.
“Failure to impose a cost upon the PRC for its malign behavior will only invite further such conduct,” they said in a letter sent Thursday and seen by Bloomberg News.
“We believe that the time has come for the United States — alongside our allies — to firmly push back on the PRC’s economic coercion,” they added, using an abbreviation for China’s formal name, the People’s Republic of China. “The US government can no longer sit on the sidelines as the PRC selectively targets U.S. and allied entities with the goal of intimidating our businesses and harming our economic security.”
Chinese authorities announced in late May that Micron failed a cybersecurity review and warned operators of critical infrastructure in the country against buying Micron’s products.
The Biden administration has voiced concern with the move, saying the ban has no basis in fact, and US officials directly raised it with their Chinese counterparts last week. Raimondo also proclaimed that the US will not tolerate the action but has yet to detail any steps to respond to it.
The dispute comes as the Biden administration seeks to engage with China on multiple levels. President Joe Biden last month predicted a “thaw” in relations would come soon and a number of his Cabinet members are scheduled to travel to Beijing when conditions are right.
Earlier: Biden Says US-China Relations Set to Improve ‘Very Shortly’
McCaul and Gallagher are asking the Commerce chief to add ChangXin Memory Technologies Inc., a leading Chinese memory chipmaker and Micron competitor, to its list of restricted entities.
CXMT’s products “are widely understood to serve military and surveillance end uses, and the company co-invests with the PRC government and military-tied entities,” the lawmakers wrote.
They cited a Horizon Advisory report they say presents a strong legal basis for Commerce to blacklist the company and asked whether Raimondo needs additional evidence or specific facts to back up the proposed move.
The pair also suggested the administration make use of the Anti-Boycott Act of 2018 and asked whether that authority is a possible avenue to prohibit US or foreign companies from supporting or furthering a boycott on Micron products in China.
According to the letter, the anti-boycott law provides a framework to examine China’s economic coercion but it hasn’t been used in cases of Chinese actions against US or foreign companies.
“Claims that CXMT is involved in national security-related activities or has a relationship with the Chinese military are false,” a spokesperson for the company said in response to the letter by McCaul and Gallagher.
CXMT’s shareholder base includes funding by “reputable” private equity firms, financial institutions and other tech companies, the spokesperson said in an emailed statement Saturday, without naming any shareholders.
Read more: US ‘Won’t Tolerate’ China’s Micron Chips Ban, Raimondo Says
China’s announcement came days after Group of Seven leaders jointly pledged coordinated action against the economic coercion frequently used by Beijing against other countries or their companies.
McCaul and Gallagher are also urging Raimondo and her colleagues to work with Tokyo and Seoul to ensure they support the US and don’t take advantage of market share that is left by the Micron blockade.
“We must quickly work with Japan and South Korea to ensure Japanese and South Korean companies do not undercut Micron by taking its sales that were lost to the PRC’s unjustifiable boycott,” they wrote.
The South Korean government won’t encourage its memory-chip firms to grab market share in China lost by Micron, a person familiar with the matter told Bloomberg News last week.
The pair is asking Raimondo to respond by June 15 with written answers and also provide the committees with briefings on the matter. A Commerce Department spokesman said they have received the letter and will respond through appropriate channels.
--With assistance from Debby Wu.
(Updates with CXMT denying relationship with Chinese military in 13th paragraph.)
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