The United States Expresses Great Disappointment in China’s Ban on Micron

In recent news, we reported that China has banned sales of some Micron products in the country. This ban came after investigating the American memory chip manufacturing company in April. Many have interpreted this ban as a tit-for-tat response from China in light of the ongoing trade war with the United States.

The United States Aims to Address China’s Ban on Micron

In light of this, the United States has expressed its disappointment in China for taking this action against Micron. The secretary of the U.S Commerce Department, Gina Raimondo spoke about this last Saturday. She said the United States was not going to tolerate such an action from China. Hence, they are working closely with Allies to address such an “economic coercion”.

The United States “won’t tolerate” China’s effective ban on purchases of Micron Technology memory chips. And is working closely with allies to address such “economic coercion, she said.

Raimondo made this statement during a news conference. This came after meeting with trade ministers in the U.S.-led Indo-Pacific Economic Framework talks. At the conference, Raimondo stated that the U.S firmly opposes China’s action against Micron.

These “target a single U.S. company without any basis. In fact, and we see it as plain and simple economic coercion and we won’t tolerate it. Nor do we think it will be successful,” she added.

Why Did China Ban Micron?

In May 21, China’s cyberspace regulator said Micron has failed its network security review. For this reason, it was going to block operators of key infrastructure from purchasing from the U.S biggest memory chip maker. This announcement led Micron to anticipate a drop in its revenue.

China’s move came a day after G7 industrial democracies reached an agreement to implement new initiatives to counter economic coercion by China. This decision was also noted by Raimondo in her statement.

“As we said at the G7 and as we have said consistently, we are closely engaging with partners addressing this specific challenge and all challenges related to China’s non-market practices,” she said.

Raimondo Also Spoke About China’s Ban on Micron in a Meeting with China Trade Minister

On Thursday, Raimondo had a meeting with China’s trade minister, Wang Wentao. At the meeting, Raimondo raised the Micron Ban issue. She said that the agreement reached within the IPEF which regards supply chain and other areas aligns with the investments made by the U.S in the CHIPS act. This act refers to a $52 billion investment by the United States. The investment is meant to promote and support domestic semiconductor production within the U.S.

“The investments in the CHIPS Act are to strengthen and bolster our domestic production of semiconductors. Having said that, we welcome participation from companies that are in IPEF countries. You know, so we expect that companies from Japan, Korea, Singapore, etc. will participate in the CHIPS Act funding,” Raimondo said.

How will China’s Ban on Micron Affect the Company’s Market Share and Revenue?

Micron has already indicated that it expects a revenue drop due to this ban. The company anticipates a lower to higher percentage drop in its revenue.

Even though this ban applies to large Chinese companies such as banks and telecom companies, this ban can go the long way to affect Micron’s brand image in China. For this reason, the company may see lower demand than it has anticipated.