US considers tougher trade rules in China chip crackdown

The U.S., facing pushback to its chip crackdown on China, has told its allies it is considering using the most severe trade restrictions available if companies continue giving the country access to advanced semiconductor technology, Bloomberg News reported on Tuesday.

These measures would be applied to companies such as Tokyo Electron and ASML Holding NV, the report added, citing people familiar with the discussions.

The U.S. is weighing whether to impose a measure called the foreign direct product rule, or FDPR, the report said.


The provision, called the Foreign Direct Product Rule, or FDPR, was first introduced in 1959 to control trading of U.S. technologies.

It essentially says that if a product was made using American technology, the U.S. government has the power to stop it from being sold - including products made in a foreign country.

The U.S. is presenting the idea to officials in Tokyo and the Hague as an increasingly likely outcome if the countries don't tighten their own China measures, the Bloomberg report added.

ASML declined to comment on the discussions, and Electron said it wasn't in a position to comment on "geopolitical issues", Bloomberg reported.

Tokyo Electron, ASML Holding, and the U.S. Department of Commerce did not immediately respond to Reuters' requests for comment.